California man accused of spying for China, US officials say

A California man who operated tours for Chinese students and visitors has been arrested, accused of spying for the People’s Republic of China, the Justice Department announced in a Monday press release.

The arrest was part of an FBI sting operation that targeted Chinese intelligence operatives in the U.S. who were delivering national security information to China, the release said.

The DOJ says Xuehua Edward Peng Peng would secure hotel rooms where he gave a double agent cash in exchange for classified information on data cards.  

The DOJ says Xuehua Edward Peng Peng would secure hotel rooms where he gave a double agent cash in exchange for classified information on data cards.  

Xuehua Edward Peng, 56, was arrested in his home Friday and ordered held without bond. According to a criminal complaint filed in the Northern District of California, Peng is a naturalized U.S. citizen who entered the country on a temporary business visitor visa and became a permanent resident in 2006. He was naturalized in September 2012.

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

It's unclear how long Peng is thought to have been operating as a spy for China. U.S. Attorney David L. Anderson said the FBI employed a double agent in 2015 who conducted exchanges with Peng in the San Francisco Bay Area and in Columbus, Ga.

Over six occasions between 2015 and 2018, Peng would secure a hotel room and leave up to $20,000 there, authorities said in the criminal complaint. The double agent would get a key to the room, take the cash and leave a digital card containing classified information, it said. Peng would then take the card and travel to Beijing to meet Chinese intelligence officers, authorities said.

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FBI officials say China poses a more serious counterintelligence threat to the United States than any country in the world. In July, FBI Director Christopher Wray testified before a Senate panel that the agency had more than 1,000 investigations involving economic espionage and attempted intellectual property theft – nearly all of which lead back to China.

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If convicted, Peng faces up to 10 years in prison and a $250,000 fine for acting as an agent of a foreign government. He is scheduled to return to court Wednesday.

The Associated Press contributed to this report.