Overview

• On June 27, FBI agents working with the Naval Criminal Investigative Service arrested Yuance Chen in Happy Valley, Oregon, and Liren Lai in Houston, Texas, as part of a broader counterintelligence investigation.
• They were indicted Monday in federal court in San Francisco for operating as unregistered agents of China’s Ministry of State Security under the Foreign Agents Registration Act.
• Prosecutors allege the pair facilitated a $10,000 cash dead-drop in Livermore, California, and conducted surveillance at a Navy base in Washington and a recruiting station in San Gabriel, California.
• The Justice Department says Chen and Lai sought to recruit U.S. Navy personnel as intelligence assets, including coordinating social media outreach and ship tours to gather insider information.
• The two defendants made their first federal court appearances Monday in Portland and Houston.