The United States has pressed espionage charges against a naturalized American citizen who operated as a courier for Chinese intelligence while working as a tour operator in California. On Monday federal prosecutors in San Francisco filed espionage charges against Xuehua “Edward” Peng, a 56-year-old Chinese-born American citizen.
Peng, a
trained mechanical engineer, reportedly entered the United States in
June 2001 on a temporary visa. In 2012 he became a naturalized American
citizen. By that time he was working for US Tour and Travel, an
independent tour operator in California.
On Friday,
officers with the Federal Bureau of Investigation arrested Peng at his
home in Hayward, California, and charged him with spying on behalf of
the Ministry of State Security (MSS), which is China’s primary external
intelligence agency. At a press conference held on Monday, David
Anderson, US Attorney for the Northern District of California, said
that Peng began working for the MSS in June 2015 and continued to do so
until June of 2018. Throughout that time, Peng participated in at least
six dead drops on behalf of the MSS, said the FBI. But he was unaware
that the agent on the other end of the dead drop was in fact an FBI
informant, who had lured Peng and the MSS into an elaborate sting
operation. The informant is referred to in the indictment as “the
source”. The FBI said it paid the informant nearly $200,000 to
facilitate the sting operation.
Most of the
dead drops took place at a hotel in Newark, California. Peng would book a
room in the hotel using a popular online booking service. He would
check in and go to his hotel room, where he would hide envelopes
containing as much as $20,000 in cash. He would then leave the room key
at the front desk for his contact to pick up. The contact (the FBI
informant) would pick up the key and the cash, and leave memory sticks
with classified US government information for Peng to pick up. Peng
would then travel to China to deliver the classified information to the
MSS.
Unbeknownst to Peng, the FBI was monitoring him all along, and managed to secretly tape his alleged espionage activities. The surveillance footage
is now part of the federal affidavit that was unsealed on Monday.
Moreover, the FBI appears to have given Peng classified information that
was approved for the purposes of the counterespionage operation against
him. It is not known whether the classified information was real,
deceptive, or a mixture of the two. It is worth noting that Peng is not a
foreign diplomat and is therefore not subject to the rules of
diplomatic immunity. He now faces a maximum of 10 years in prison and a
fine of up to $250,000 if convicted.
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