"The charges announced today specifically regard the use of an American citizen to remove classified national security information from the United States to the People's Republic of China," US Attorney David L. Anderson announced during a Monday press conference. "An American citizen acted as a secret agent of the People's Republic of China against the United States here in the Northern District of California."
According to the 22-page criminal complaint, Peng acted as a secret agent for China between June 2015 and June 2018, working for the Chinese intelligence agency, the Ministry of State Security (MSS), and carrying out dead drops, a form of espionage tradecraft used to transfer information between two people, such as two agents, at a secret, predetermined location. A video released by the US Justice Department seemingly shows Peng conducting a dead drop in a US hotel room.
According to Anderson, the Federal Bureau of Investigation (FBI) and the Justice Department used a “confidential human source” to determine that Peng was an agent for China, CBS reported. The US used a double agent to meet with MSS officers in China and found that the MSS used the double agent to send information to Peng in Secure Digital (SD) memory cards dropped off at hotels in California and Georgia, CBS reported. US authorities allege that Peng left as much as $20,000 in hotel rooms in the US in at least four different dead drops, taking the SD cards and traveling with them to China to meet Chinese intelligence officers.
“The conduct charged in this case alleges a combination of age-old spycraft and modern technology,” Anderson said in a statement Monday.
“Defendant Xuehua (Edward) Peng is charged with executing dead drops, delivering payments, and personally carrying to Beijing, China, secure digital cards containing classified information related to the national security of the United States,” Anderson added.
— Laura Anthony (@LauraAnthony7) September 30, 2019
Peng could be imprisoned for up to 10 years and face a $250,000 fine if convicted, according to authorities.
“The charges announced today provide a rare glimpse into the secret efforts of the People’s Republic of China to obtain classified national security information from the United States,” Anderson added.
Peng was arrested at his home Friday and held without bond. The South China Morning Post reports that his next hearing is scheduled for Wednesday.