Sino-American doubtful loyalty

Sino-American tour guide worked as spy for Chinese intelligence

By Caitlin Yilek

Chinese spy Xuehua “Edward” Peng

A California man who worked as a tour guide for Chinese visitors and students was actually a spy for Chinese intelligence, the Justice Department alleged Monday in an unsealed criminal complaint.
Authorities charged 56-year-old Xuehua “Edward” Peng, a naturalized U.S. citizen, with acting as an illegal foreign agent for the Ministry of State Security, China’s intelligence agency. 

He was arrested Friday at his home in the San Francisco Bay Area and is accused of completing dead drops involving a double agent and tens of thousands of dollars in cash, then delivering the information to Chinese intelligence.
Peng’s work for the Chinese was exposed in a double-agent operation that began in 2015, according to the complaint. 

Peng is accused of taking part in six dead drops, where he passed on classified information from a double agent to the Chinese and gave the double agent cash in return.
The double agent was not identified in the criminal complaint and has been paid nearly $200,000 by the U.S. government as of June. 

Court documents did not detail what classified information was given to Peng at the direction of American authorities, but the complaint said “at all times the government carefully selected the classified information for the Source and were aware of the materials that the source passed.”
“The conduct charged in this case alleges a combination of age-old spycraft and modern technology,” U.S. Attorney David Anderson for the Northern District of California said in a statement.
Peng made at least six dead drops, which included one dry run, from June 2015 to June 2018, the complaint said. 

In at least four of the dead drops — a method of spycraft used to exchange information without individuals meeting — Peng had left $10,000 to $20,000 in cash in envelopes hidden in hotel rooms in California and Georgia. 

Peng would then leave a room key for the double agent, who would retrieve the cash and leave a secure digital card with classified information, which Peng would later come back for, the complaint said.
The FBI secretly filmed at least two of the exchanges and monitored his "coded" discussions with Chinese intelligence officers about when and where to book the hotel rooms and when to travel to China.
Peng’s case is another instance of the U.S. government warning of Chinese espionage abilities.
“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,” John Demers, the assistant attorney general of national security, said in a statement.
Last week a former intelligence officer for the Defense Intelligence Agency was sentenced to 10 years in prison for spying on behalf of China. 

The case of Yujing Zhang, the Chinese woman who was convicted earlier this month of trespassing at President Trump’s Mar-a-Lago resort in Florida and lying to Secret Service agents about why she was there, is part of a counterintelligence investigation into Chinese espionage.