A California man accused of spying for China pleaded guilty to acting as an unregistered agent for the country.
As part of the plea agreement, prosecutors will recommend that Xuehua “Edward” Peng serve four years in prison instead of the maximum 10-year sentence. Peng, who worked as a tour guide for Chinese visitors and students, will be sentenced in March.
Authorities charged 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 in September at his home in the San Francisco Bay Area and was accused of completing dead drops involving a double agent and tens of thousands of dollars in cash, then passing on the information to Chinese intelligence.
His work for the Chinese was uncovered in a double-agent operation that began in 2015, according to the criminal complaint. Authorities said Peng participated in six dead drops in which he passed on classified information from a double agent to the Chinese and then gave the double agent, who was not identified in the criminal complaint, cash in return.
Court documents did not detail what classified information was given to Peng at the behest of American authorities, but the complaint said the government “carefully selected” which information to pass on to him.
In at least four of the dead drops — a method of spycraft used to exchange information without individuals meeting — Peng left tens of thousands of dollars 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 small electric storage devices with classified information, which Peng would later collect, the complaint said.
The FBI secretly filmed at least two of the dead drops and monitored Peng’s “coded” discussions with Chinese intelligence officers about when and where to book the hotel rooms and his travels to China.
In the plea agreement, Peng said he was approached by a state security official with China when he was on a business trip in 2015 and asked to partake in the dead drops.
“I was never informed of the contents of these devices and at no time learned what information was stored on them,” Peng said in the plea agreement.
A crackdown on Chinese espionage in the United States has picked up in recent years. Three former U.S. intelligence officers have been convicted in the last year of conspiring with the Chinese. Jerry Chun Shing Lee, a longtime CIA officer, was sentenced to 19 years in prison on Friday for conspiring to spy for China.
