Tuesday, October 1, 2019

Tour guide arrested for allegedly spying for China

The Department of Justice released this video of Edward Peng in a "dry drop."
Court records were released Monday (Sept. 30) accusing a Chinese American tour guide of spying for the People's Republic of China.

Xuehua "Edward" Peng was arrested at his home in Hayward, Calif and taken into custody Friday and charged with acting as an illegal agent of a foreign government, according to a criminal complaint.

Peng, reportedly had a degree in mechanical engineering and was trained in traditional Chinese medicine but worked most recently as a tour guide for Chinese tourists.

“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. His arrest exposes and disrupts an operation by those Chinese intelligence officers to collect such information without having to step foot in this country,” said Assistant Attorney General of National Security John C. Demers. “

"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.”

“The conduct charged in this case alleges a combination of age-old spycraft and modern technology,” said U.S. Attorney David L. Anderson for the Northern District of California. “Defendant Xuehua (Edward) Peng is charged with executing dead drops, delivering payments, and personally carrying to Beijing, China, secure digital cards containing classified information related to the national security of the United States.” 

According to the complaint filed Sept. 24, 2019, and unsealed this morning, Peng, 56, acted at the direction and under the control of MSS officials in China in retrieving classified information passed to him by a confidential human source (the source), leaving money behind for the source, or both. 

Peng's activities included one dry run and at least five successful “dead drops” between October 2015 and July 2018. The dead drops occurred in the Bay Area and in Columbus, Georgia.

In the June 23, 2015, “dry run,” no information or money was exchanged. Instead, an empty package was left by the source for Peng at the front desk of a hotel, and Peng later retrieved it. In the first successful dead drop, Peng retrieved a package containing an SD card from the front desk of a hotel. In each of the other four successful dead drops, Peng booked hotel rooms and left a room key to be picked up by the source. Peng then left envelopes of cash in the room, retrieved a secure digital card left there by the source, or both.

In each instance in which he retrieved an SD card from the hotel room, Peng then traveled to Beijing, China, shortly thereafter. The FBI secretly filmed Peng conducting some of the dead drops, and intercepted Peng’s telephone conversations with his MSS handlers in China.

If convicted, Peng faces a maximum sentence of 10 years, His next hearing is scheduled for Wednesday.

U.S. Attorney Anderson further stated, “The charges announced today provide 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.”
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