The outpost, which occupied an entire floor above a ramen stall, did provide basic services like renewing Chinese citizens' driver licenses, but it also helped Beijing identify pro-democracy activists living in the US, say federal authorities.
Matthew Olsen, an assistant attorney general in the US Department of Justice, called the attempt to operate the undeclared overseas police station "a clear affront to American sovereignty and danger to our community that will not be tolerated".
The station was closed in the autumn of 2022 after the Federal Investigation Bureau launched an investigation.
But Chen and Lu destroyed text messages they exchanged with an MPS official when they learned of the probe, prosecutors said.
The men, who are both American citizens, were arrested in April last year.
On Wednesday, Chen, 60, pleaded guilty to conspiring to act as an agent for China, and faces up to five years in prison when he is sentenced next year.
Chen's acknowledgement of guilt is a "stark reminder of insidious efforts taken by the [Chinese] government to threaten, harass, and intimidate those who speak against their Communist Party," Robert Wells, an executive assistant director of the FBI's National Security Branch said in a statement.
Lu, 59, has pleaded not guilty and is awaiting trial. Prosecutors have accused him of harassing a purported Chinese fugitive to return to China and for helping to locate a pro-democracy activist in California on behalf of the Communist Party.