Xuehua ‘Edward’ Peng, California man, charged with spying for China

A California man has been accused of acting as courier for China’s Ministry of State Security, according to an indictment unsealed Monday.

Xuehua “Edward” Peng was charged with acting as an illegal foreign agent after being ensnared in an FBI sting operation targeting Chinese spies operating in the United States, the Justice Department said.

Mr. Peng, 56, a U.S. citizen living in the San Francisco suburb of Hayward, California, was arrested Friday. He is being held without bond ahead of a detention hearing scheduled for Wednesday.

Federal prosecutors say Mr. Peng was “trained in spycraft,” exchanging classified national security information in exchange for cash.

On six separate occasions, Mr. Peng collected packages at hotels in Northern California and Georgia, according to court documents. In four of those cases, he collected packages containing SD cards with confidential information while dropping off a total of $70,000 for his source, prosecutors say.

The scheme began in March 2015 after Mr. Peng met with a Chinese intelligence officer, according to court documents. He completed a trial run in June 2015 and completed five more runs through June 2018 prosecutors say.

The pattern was the same throughout Mr. Peng’s run, according to prosecutors. They say his source would place the SD card in a book wrapped in a bag. The book would be left at a hotel’s front desk for “Ed,” according to the criminal complaint.

Mr. Peng flew to China on at least one occasion to drop of the SD card, according to court documents.

“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,” said John C. Demers, Assistant Attorney General for National Security.

Mr. Peng is believed to have been working as a tour guide in San Francisco for Chinese students and visitors, according to the criminal complaint. He arrived in the United States on a temporary business visa, but became a naturalized citizen in September 2012.