Overview

• Chen and Lai were arrested on June 27 and made their first federal court appearances in Portland and Houston on Monday.
• They are charged under the Foreign Agent Registration Act for acting as undeclared agents of China’s Ministry of State Security, carrying penalties of up to 10 years in prison and $250,000 in fines.
• Their 2022 dead drop in Livermore, California, involved leaving a backpack with at least $10,000 in cash in exchange for classified national security information.
• Court filings allege they conducted surveillance at a Navy base in Washington state and at a recruitment center in San Gabriel, California, photographing service member data for transmission to the MSS.
• An FBI affidavit states that Lai began grooming Chen as an MSS asset in mid-2021 and that they met with Chinese handlers in Guangzhou in April 2024 and March 2025 to coordinate intelligence tasks and payments.