U.S. Citizen Spying for China Gets Four Years in Prison

Naturalized U.S. citizen Edward Peng Xuehua was sentenced to 48 months in prison and fined $30,000 Tuesday after being convicted of passing sensitive U.S. information to China on behalf of Beijing’s Ministry of State Security (MSS).

Based out of California, where he operated a registered San Francisco tour business serving Chinese visitors to the United States, Peng, 56, was arrested in Hayward, California, in September on charges of participating in dead drops of classified information and money transfers on behalf of Chinese intelligence.

Reportedly undone by the Chinese double agent he worked with to procure and exchange the information, the FBI surveilled and recorded Peng making his dead drops in various hotel rooms in California and Columbus, Georgia, from 2015 to 2018.

In these dead drops, Peng picked up SD cards loaded with U.S. secrets left by the Chinese double agent and, in at least one case, flying to Beijing to deliver them himself. In addition to retrieving SD cards laden with sensitive information, Peng also left money for the double agent, who had been targeting the MSS with the sting operation.

Peng pleaded guilty in federal district court in Oakland, California, to one count of illegally acting as an unregistered agent of a foreign government. For this crime, Peng could have faced up to 10 years in prison and a fine of $250,000.

Arriving in the U.S. for the first time in 2001 on a business visa, Peng stayed in the country legally as a non-immigrant worker. In 2006, he became a permanent resident after marrying, which put him on track to become a full citizen in 2012. His registered business, U.S. Tour and Travel, catered to Chinese citizens visiting the U.S. with the intention of studying here.

Assistant Attorney General for National Security John Demers said in a statement:

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…This case is but one example of the Chinese government’s multifaceted espionage efforts…[Peng] is now being held accountable for his criminal actions and his betrayal of his oath of citizenship.

U.S. Attorney David L. Anderson for the Northern District of California admonished the crime, saying, “This day of reckoning comes from Peng’s decision to execute dead drops, deliver payments and personally carry to Beijing…Peng will now spend years in prison for compromising the security of the United States.”