HOUSTON – Two Chinese residents are accused of spying and delivering sensitive military information overseas, one of whom lived in Houston.
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According to court records, Yuance Chen and Liren “Ryan” Lai are accused of spying as undercover operatives. The courts claim the two “acted within the United States under the direction and control of the Government of the People’s Republic of China.”
Lai, described by investigators, is a Chinese citizen and resident, but recently arrived in Houston in April 2025 through a visitor’s visa. However, court documents say Chen, who claimed residency in California, worked with Lai “at least as early as May 2021, up to and including April 2025...to carry out various clandestine operations.”
This included what court records described as “dead drop” payments of cash, which involve passing information between individuals at a secret location without them having to meet. The court claims this was done on behalf of China’s Ministry of State Security (MSS) to gather “intelligence about U.S. Navy service members and bases and assisting with efforts to recruit other potential MSS assets from within the U.S. Military.”
“The FBI arrested two Chinese nationals who were allegedly attempting to recruit U.S. military service members on behalf of the PRC,” FBI Director Kash Patel explained. “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.”
Records claim Lai last visited the U.S. in March 2023 and left in May 2023, identifying Chen as his point of contact and using his business as his U.S. address.
In April 2025, investigators say Lai came to Houston, saying he’d be in the city for two weeks on business. Instead, court documents claim he’s been in the U.S. for more than two months.
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Records show that Lai also told U.S. Customs and Border Protection agents he had no plans to leave Houston. However, investigations reveal he drove to Southern California on May 9, court documents say, and came back on May 15.
During that time, FBI surveillance videos showed Lai placing a suitcase in the car before leaving the Houston area to a Navy employee stationed in Southern California.
Lai was arrested on Friday at an apartment on Fountain View Drive, the FBI confirmed.
“This case underscores the Chinese government’s sustained and aggressive effort to infiltrate our military and undermine our national security from within,” U.S. Attorney General Pamela Bondi said. “The Justice Department will not stand by while hostile nations embed spies in our country – we will expose foreign operatives, hold their agents to account, and protect the American people from covert threats to our national security.”
Both Chen and Lai have been charged with operating in the U.S. as an agent of a foreign government without notifying the U.S. attorney general. If convicted, both men face a fine of up to $250,000 and up to 10 years behind bars.