The investigation into the sale of military secrets by U.S. soldiers to Chinese buyers started with a focus on a Hillsboro man who gained U.S. citizenship through a special military program designed to recruit foreign nationals with special skills, FBI officials said.
Ruoyo Duan joined the Army in 2014 and was medically discharged three years later after an on-duty injury and has been collecting Veterans Affairs disability benefits since. He served at Fort Wainwright in Alaska, according to FBI agents.
He was in turn enlisted as a “co-optee” — a person targeted by Chinese intelligence services “to find and recruit folks who have access to sensitive and or classified information,” according to the FBI.
Duan, who goes by the aliases “Little Fish” and D.X.Y," appeared Friday afternoon in federal court in downtown Portland, accused of conscripting friends still on active duty to steal classified defense information and then sell it to Chinese nationals.
“It’s important for people to realize that this is a very real threat,” Douglas A. Olson, Oregon’s FBI special agent in charge, told The Oregonian/OregonLive in an interview.
“We’re here in Oregon, in the Pacific Northwest, and we have somebody that we picked up in Hillsboro yesterday that was providing information to Chinese intelligence services,” Olson said.
Through an assistant federal public defender, Duan entered not guilty pleas to an indictment charging him with bribing a public official, receipt of stolen government property and conspiring to gather, transmit and lose national defense information.
Duan, 39, is accused of working with two active Army soldiers from the Joint Base Lewis-McChord in Washington from late November 2021 through December 2024.
FBI agents arrested Duan at his Hillsboro home Thursday morning and searched the home with a warrant as other federal agents arrested Capt. Li Tian, 42 at the base and Sgt. Jian Zhao, at his home in Lacey, Washington, according to court records and the FBI.
Tian worked as a health services administrator and Zhao as a battery supply officer for the 17th Field Artillery Brigade at Lewis-McChord. Among Zhao’s specific responsibilities was “property accountability,” according to court records.
The investigation began in July 2023 after counterintelligence officers with the U.S. Department of Defense contacted Portland’s FBI.
Duan and Tian had attended a university in China together. They both entered the military and became U.S. citizens through the now-defunct U.S. program called Military Accessions Vital to the National Interest, known as MAVNI.
The program is intended to draw people with unique skills such as foreign language fluency or a health care background and allows foreign nationals to obtain citizenship if they serve in the U.S. military for three years. The program began in 2008 and was suspended in 2016.
In one communication in February 2023, Tian allegedly wrote to Duan, “My supply has access” and described his so-called “supply” as “also a proud member of our mavni," according to their indictment.
Tian and Zhao are accused of entering restricted military offices and sharing technical manuals and documents and specifics about different weapons systems, including details about the High Mobility Artillery Rocket System, which is known as HIMARS and was used on the battlefield in Ukraine, documents related to U.S. military readiness in the event of a conflict with China and details on planning, training, and operations of a Stryker Brigade Combat Team, an infantry force known for their rapid deployments, according to court papers.
“As soon as we found out that the activity was going on,” Olson said the FBI assigned investigators in Oregon and Washington and “put protections in place” on the base including video surveillance “to put guardrails on what was leaking out in terms of information being shared.”
The video surveillance caught Zhao photographing sensitive PowerPoint presentations from a computer in his office, Tian taking a document marked “SECRET” from an office around 10:50 p.m. one night and not returning it and Tian printing classified documents, according to court records.
Communications between the three men and Chinese nationals were all done in Mandarin, requiring FBI linguists to assist and decipher them.
During the course of the investigation, Duan made at least one trip to China, according to the FBI. He was referenced in Mandarin messages as “Boss Duan,” according to the court documents.
The cases are extremely difficult to work because prosecutors must prove the defendants’ intent was to provide the stolen military material to a foreign adversary, not just that they stole it, Olson said.
At least five FBI agents in Portland’s office worked on the investigation since summer 2023. All have military backgrounds, as well as their boss Olson. The agents said they took the case “personally.” Their investigation is continuing.
“It’s very rare to have a case like this, but when you do have a case like this, it could be tremendously damaging to our security,” Olson said.
Zhao made at least $15,000 by repeatedly selling sensitive national defense information, including an encrypted hard drive and 20 classified hard drives to unidentified Chinese buyers operating on behalf of Chinese intelligence services, federal prosecutors allege. He sold an encrypted military computer for $1,000, for example, according to court records.
Zhao also is accused of sending sensitive military documents to Duan using his personal email.
Tian is accused of emailing contacts in Hong Kong in November 2021, identifying himself as a “friend of Duan” and looking for a “job opportunity,” his indictment alleges.
Tian sent sensitive documents on combat capabilities and military operations from his Army email to his personal email despite the documents containing warnings about dissemination of the material, his indictment alleges.
At times, Chinese buyers sent money using PayPal to Duan, who then forwarded dollars to Zhao and Tian, the indictments allege.
Duan claimed in emails designed to disguise the thefts that he was seeking information to write an article and at other times claimed he was looking for class and teaching materials, according to the indictments.
Tian and Zhao held secret security military clearance. Zhao is accused of sharing “TOP SECRET and SECRET” military documents with Chinese nationals, sometimes negotiating for higher prices for more sensitive documents, according to prosecutors.
The soldiers sent the information “using everyday methods - computer and social apps,” Assistant U.S. Attorney Katherine A. Rykken wrote in a memo seeking Tian’s detention.
In a correspondence via Facebook Messenger in February 2023, Duan reportedly wrote to Tian requesting details on a vehicle with “reconnaissance equipment.”
“I feel that information is a more important advantage over there,” read Duan’s message, according to court records.
Assistant U.S. Attorney Geoffrey Barrow called the soldiers’ alleged actions an “intolerable breach and betrayal” of their U.S. Army duties to defend the country.
Zhao and Tian appeared in federal court in Tacoma on Thursday. Zhao also is a U.S. citizen, federal officials said.
During a search of Tian’s home on Thursday, FBI agents found a CD with the handwritten word “Secret” on it and other military documents, according to Rykken. During a post-arrest interview with the FBI, he “minimized his conduct,” but also said, “I’m 100% guilty,” Rykken’s detention memo said.
Tian and Duan will be prosecuted in Oregon, while Zhao will be prosecuted in Washington.
Duan’s defense lawyer, Assistant Federal Public Defender Conor Huseby, consented to Duan’s continued detention but said he believes Duan is “releasable” and will return to court to prepare a proposed release plan.
A 14-day trial for Duan is tentatively set for April 29.
Messages left with public affairs at the Lewis-McChord base seeking comment on the arrests were not returned.
While the case targeted government military information, the Chinese intelligence services have an “insatiable appetite” for all kinds of information, including data from businesses in the private sector, Olson said.
“I would encourage people to just kind of double down on their security and be aware that they may have access to information that Chinese intelligence services are interested in,” he said.
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