Two Chinese agents arranged for delivery of a $10,000 secret payment for information on U.S. national security in a backpack through a “dead drop” in Livermore, prosecutors said.
Liren “Ryan” Lai, 40, and Yuance Chen, 39, both nationals of the People’s Republic of China, were sentenced to 30 months in federal prison, the U.S. Attorney’s Office for Northern California said Friday.
The two gathered information about U.S. military personnel and installations and assisted efforts to recruit intelligence assets from within the U.S. military for China’s Ministry of State Security, prosecutors said.
The MSS is China’s principal civilian intelligence service, responsible for conducting foreign intelligence and counterintelligence operations, prosecutors said.
“Lai and Chen facilitated a clandestine cash payment of approximately $10,000 in January 2022,” prosecutors said. “They coordinated with individuals in the United States to leave a backpack containing the cash in a locker at a recreational facility in Livermore.”
“Such arrangements, known as “dead drops,” allow intelligence operatives to transfer money or information without directly meeting the intended recipient,” according to prosecutors.
Military intelligence collected
Chen obtained photographs of Navy Base Kitsap in Bremerton, Wash., and photos and videos of military recruits and active-duty sailors inside a Navy recruiting station in Southern California, prosecutors said.
Chen also collected personal identifying information about a U.S. Navy employee and maintained detailed biographical information about military personnel who were potential intelligence targets, prosecutors said.
In May 2025, Lai was sent to Phoenix “to facilitate another clandestine cash payment of approximately $20,000 in furtherance of its intelligence operations,” the U.S. Attorney’s Office said.
Lai and Chen were arrested on June 27, 2025. Lai pleaded guilty on Dec. 12, 2025, and Chen pleaded guilty on Feb. 20, 2026.