Tour Operator Charged -- Admitted to Being Chinese Informant
A California man has pleaded guilty in federal court to spying for China beginning in 2015.
Xuehua Edward Peng, 57, of Hayward, California, has agreed to serve four years in prison and pay a $30,000 fine, according to Fox News.
Judge Haywood S. Gilliam Jr. of the U.S. District Court for the Northern District of California would not accept Peng’s plea deal until March, when sentencing is set to occur.
In the plea agreement, Peng said he was approached by a Chinese security official in 2015 and agreed to serve China as a courier of secrets, the Los Angeles Times reported.
The agreement said Peng made at least $30,000 by spying for China.
According to the criminal complaint filed against him, Peng was involved in a series of dead drops, in which he would pick up an SD card from a hotel room and then travel with it to China.
He would leave money — as much as $20,000 — in a hotel room where he would pick up the SD card, the complaint said.
The dead drops occurred in the San Francisco Bay Area and in Columbus, Georgia, according to a Justice Department news release.
“I was never informed of the contents of these devices and at no time learned what information was stored on them,” Peng said in the plea agreement.
Authorities have said the information left for Peng to transmit was not real. It was rather provided by a double agent who had been approached by China but worked for the U.S. instead.
Peng did not know that at the time that he was being filmed and that his coded conversations with Chinese officials were being intercepted, the release said.
“According to the allegations, Peng conducted numerous dead drops here in the United States on behalf of Chinese intelligence officers and delivered classified information to them in China,” Assistant Attorney General of National Security John C. Demers said when the charges were filed against Peng in September.
“His arrest exposes and disrupts an operation by those Chinese intelligence officers to collect such information without having to step foot in this country.”
“Coming on top of our many recent Chinese espionage cases — involving both national defense and intellectual property information — this case illustrates the seriousness of Chinese espionage efforts and the determination of the United States to thwart them,” he added.
The case provides “a rare glimpse into the secret efforts of the People’s Republic of China to obtain classified national security information from the United States and the battle being waged by our intelligence and law-enforcement communities to protect our people, our ideas, and our national defense,” U.S. Attorney David L. Anderson said.
The federal government has had Peng, a naturalized U.S. citizen, in custody since September.
Peng is listed as president of U.S. Tour and Travel in San Francisco, which has no website, and allegedly gave tours for Chinese visitors to San Francisco, Fox reported.
John Brown, the FBI’s assistant director of the counterintelligence division, said China should learn a lesson.
“This case should serve as a warning to the government of China as well as any other foreign adversary looking to replicate this activity. The FBI, and our intelligence and law enforcement partners, will not waiver,” he said in September.
“We will bring all of our resources to bear to defeat hostile foreign intelligence services and protect our nation’s security.”
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