California Man Sentenced to 4 Years in Prison for Acting as Agent of Chinese Intelligence Agency

Xuehua (Edward) Peng, 56, a former tour operator in the San Francisco Bay Area, pleaded guilty in November 2019 in connection with acting as a courier for China’s Ministry of State Security (MSS)—the country’s chief intelligence agency.

Peng admitted to delivering classified U.S. national security information to MSS officials in China. He admitted to conducting five “dead drops” from 2015 to 2018, during which he retrieved secure digital (SD) cards containing classified information from hotel rooms in San Francisco and Columbus, Georgia, and then traveled to Beijing to deliver the SD cards.

He admitted to knowingly working for the Chinese regime, and was paid at least $30,000 for his services to the MSS.

“This case exposed one of the ways that Chinese intelligence officers work to collect classified information from the United States without having to step foot in this country,” Assistant Attorney General for National Security John C. Demers said in a statement.

Peng admitted that he was recruited after being approached by a Chinese official during a business trip to China in March 2015. The official asked Peng to use his U.S. citizenship to help them with matters of interest to the regime, the DOJ said. Peng later came to realize that the official was an intelligence officer at MSS, but went ahead with the activities anyway.

According to the complaint, the FBI secretly filmed Peng conducting some of the pick-ups and deliveries, and intercepted his phone calls with his MSS handlers in China.

Demers said that this case represented “but one example of the Chinese government’s multi-faceted espionage efforts.” Federal authorities in recent years have cracked down on Chinese espionage efforts in the United States.

Last year, a former U.S. Defense Intelligence Agency officer was sentenced to 10 years in prison for attempted espionage on behalf of China. A former CIA officer was also sentenced to 19 years imprisonment for an espionage conspiracy with the regime.

Peng was sentenced on Monday by a U.S. District Court Judge in California, who also ordered him to pay a fine of $30,000.

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