Federal Bureau of Investigation arrest man suspected spying for China

US attorney David Anderson announces criminal spy charges against a San Francisco Bay Area tour operator Edward Peng Xuehua

A California man has been charged with acting as an illegal foreign agent as part of an elaborate Federal Bureau of Investigation sting operation targeting Chinese intelligence operatives working in the us, the Justice Department said Monday.

Peng Xuehua, also known as Edward Peng, was taken into custody on Friday in Hayward, California, and was denied bail during an initial court appearance before a USA magistrate judge that same day, federal prosecutors said at a Monday (Sept 30) morning news conference.

'According to the allegations, Peng conducted numerous dead drops here in the United States on behalf of Chinese intelligence officers and delivered classified information to them in China.

56-year-old Xuehua Peng, also known as Edward, was working in the San Francisco area as a tour and sightseeing operator.

"We have criminal spies that are running around in our area of responsibility and it's the FBI's mission to stop this, so what's going on in the rest of the world, it doesn't matter to us", he said.

Peng and the Ministry of State Security handler would often speak in code on the phone - such as referring to an upcoming trip to China as a trip with the "educational company". The double agent would then get a key to the room, take the cash and leave a digital card containing information, it says.

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An American citizen was arrested last week on suspicion of passing national security secrets to China, and the accusations leveled in the criminal complaint sound like they were ripped from the pages of a Cold War spy novel. In July, FBI Director Christopher Wray testified before a Senate panel that the FBI had more than 1,000 investigations involving economic espionage and attempted intellectual property theft - almost all of which lead back to China.

"In March 2015, the United States employed a double agent who met with MSS (Ministry of State Security - China) officers in the PRC", explained attorney Anderson.

He became a permanent resident in February 2006, following his marriage to his then wife, and was naturalised as a United States citizen in September 2012. Anderson is a lawyer for the Northern District of California, which is handling prosecution in the case.

He holds an acupuncturist licence from the state. It was not immediately apparent if Peng had an attorney who could be reached for comment. Records list Peng as the president of US Tour and Travel in San Francisco, but news agency reporters could not turn up a website for the company in an online search engine.

The criminal complaint alleges Peng knowingly acted in the U.S.as an agent for China for three years, between June 2015 and June 2018. More than 80 percent of all economic spying charges since 2012 have involved China.

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