FBI charges Hayward man with acting as illegal agent for China

SAN FRANCISCO (KTVU) -  A Hayward man was charged on Monday with acting as a spy for China, according to the U.S. Department of Justice. 

Authorities say Xuehau "Edward" Peng, 56, for years acted as an illegal foreign agent and delivered classified national security information to Chinese intelligence officers. 

Peng was arrested on Friday at his home in Hayward. 

Peng with the help a double agent, was able to get classified information back to his native China, according to FBI officials. 

Assistant Attorney General of National Security John Demers said, "Coming on top of our many recent Chinese espionage cases—involving both national defense and intellectual property information—this case illustrates the seriousness of Chinese espionage efforts and the determination of the United States to thwart them."

Peng, who worked as a tour guide in San Francisco, allegedly used age-old spycraft and modern technology like electronic storage devices, to obtain and disseminate the information. 

U.S. Attorney David Anderson said at a press conference on Monday, "Peng's activities to expose the United State went far beyond innocent sightseeing." 

Officials say he conducted numerous "dead drops" in Oakland, Newark, and Georgia, between October 2015 and July 2018, shuttling classified U.S. national security information to Chinese intelligence agents.

Anderson says a dead drop is a "method used to pass money, information between two agents using a predetermined destination."

Peng worked under the direction of China's ministry of state security (MSS) in retrieving sensitive information passed to him by a confidential source on SD cards, leaving money behind for the source or both, according to the complaint filed on Sept. 24.

Once in possession of the SD cards, Peng would then travel to Beijing, China and deliver the material. 

Unknown to Peng, the source who was giving him the information was a double agent working with U.S. officials. 

FBI agents credit the source with helping bring Peng down and preventing the information from getting into the wrong hands. 

One of Peng's neighbors said the accused spy had a taste for luxury cars. 

Neighbor Danilo Serrano told The Associated Press that Peng moved into their residential neighborhood in Hayward, California, about five years ago. At the time, Peng had a Lexus and a Porsche that he kept parked outside his modest home, and then about a year ago bought a Tesla SUV.

Serrano said he knew his neighbor only as Ed. He said he never knew what Peng did for work, but that he was a quiet and friendly neighbor who seemed to travel a lot.

He was shocked to learn of Monday's announcement, saying, "I can't believe Ed was a Chinese spy!"

Peng faces a maximum sentence of 10 years in federal prison and a fine of $250,000 for acting as an agent of a foreign government.