SAN DIEGO (CNS) - As part of a multi-state investigation that included enforcement actions in San Diego, two Chinese nationals have been jailed on suspicion of spying on U.S. military facilities and trying to recruit American service personnel to aid in the alleged crimes, the FBI announced Tuesday.
The suspects, Yuance Chen, 38, and Liren "Ryan" Lai, 39, made their initial appearances in federal court Monday in Portland, Oregon, and Houston, Texas, on charges issued out of the Northern District of California for purportedly committing espionage offenses on behalf of the government of China, the federal investigative service reported.
At least one search warrant in the case was served in San Diego, according to comments about the investigation posted on social media by FBI Deputy Director Dan Bongino. Others were issued in San Francisco, Houston and Portland, Bongino wrote. Details on those enforcement actions were not released.
Chen, a legal permanent U.S. resident who lives in Happy Valley, Oregon, and Lai, who traveled from China to Houston, Texas, on a tourist visa in April, were arrested last Friday on a criminal complaint charging them with overseeing and carrying out various offenses in the United States on behalf of China's principal foreign-intelligence service, the Ministry of State Security (MSS).
Those activities allegedly included facilitating a "dead drop" cash payment for information about U.S. national security, gathering intelligence about U.S. Navy personnel and bases and assisting with efforts to recruit other people from within the American military as potential MSS assets, according to the FBI.
Chen and Lai were arrested on June 27 in Happy Valley and Houston, the federal investigative agency reported.
"The Chinese Communist Party thought they were getting away with their scheme to operate on U.S. soil, utilizing spy craft like dead drops to pay their sources," FBI Director Kash Patel said.
"This case was a complex, coordinated effort and is an example of outstanding counterintelligence work done by FBI San Francisco, Portland, Houston (and) San Diego, and the Counterintelligence Division. The FBI will continue to vigilantly defend the homeland from China's pervasive attempts to infiltrate our borders."
As alleged in a criminal complaint unsealed Monday, the Chinese government conducts intelligence activities against the United States through various means, including the MSS, which handles civilian intelligence collection and is responsible for counterintelligence and foreign intelligence, as well as political security.
According to the court document, Lai recruited Chen to work on behalf of the MSS about four years ago. While in Guangzhou, China, in January 2022, they allegedly worked together to facilitate a payment of at least $10,000 on behalf of the MSS, working with other people in the United States to leave a backpack with the cash at a day-use locker at a recreational facility located in Livermore.
Thereafter, Lai and Chen allegedly continued to work on behalf of the MSS, including by attempting to help identify potential assets for MSS recruitment within the ranks of the U.S. Navy. In 2022 and 2023, according to the complaint, Chen was tasked by Lai to visit a naval installation in Washington State and a Navy recruitment center in San Gabriel, where Chen allegedly obtained personal information about recruits that he apparently transmitted to an MSS intelligence officer in China.
Chen purportedly also got instructions from the MSS on how to engage and recruit sailors and methods for minimizing his risk of exposure, contacted a Navy employee on social media, and provided information about that person to the MSS.
Chen and Lai are charged with violating a federal statute that makes it a crime for a person to operate or agree to operate within the United States as an agent of a foreign government without notification to the U.S. attorney general. If convicted, they each face up to 10 years in prison and a maximum fine of $250,000.
The FBI San Francisco Field Office is leading the investigation, with assistance from the federal agency's offices in San Diego, Houston and Portland, and additional support from the Naval Criminal Investigative Service.
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