A San Francisco tour guide has been accused of spying for China, and video shows him hiding $20,000 in a hotel room in exchange for state secrets

A San Francisco tour guide has been accused of spying for China, and video shows him hiding $20,000 in a hotel room in exchange for state secrets

edward peng


Video released by the Justice Department shows Edward Peng in a hotel room, where prosecutors allege he collected $10,000 in exchange for an SD card.

  • Xuehua "Edward" Peng, 56, a naturalized US citizen living in Hayward, California, was arrested last Friday on suspicion of spying for China.
  • According to the criminal complaint, Peng acted as a courier for China's intelligence agency, taking memory disks that he believed contained national security secrets to Beijing.
  • Peng was arrested as part of a program started four years ago to weed out Chinese spies.
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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.

Xuehua "Edward" Peng, 56, was arrested last Friday at his home in Hayward, California. He is a naturalized US citizen who first moved to America in 2001. According to NBC News, he worked as a tour guide in San Francisco, even though he was trained as a mechanical engineer in China.

According to the criminal complaint unsealed Monday, Peng is accused of acting as a courier for China's intelligence agency, the Ministry of State Security.

While China has often been accused of stealing intellectual property from the US, this time they are accused of going after national security secrets - spy games more typically associated with the Russians.


edward peng

Justin Sullivan/Getty

United States attorney David L. Anderson holds up a SD memory card as he speaks about the arrest of Edward Peng on September 30.

According to The New York Times, the FBI started a double-agent program in March 2015 to root out spies working for the Chinese.

One of their double agents, identified only as "the source" in the criminal complaint, coordinated a series of dead drops with Peng involving digital memory cards that prosecutors allege contained important national security information on them, which Peng would then help get to China.

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The feds allege he and his handler used 'sightseeing' as a codeword

In one incident, the double agent emailed his handler saying he would be traveling to San Francisco for sightseeing, a code prosecutors said meant he was conducting a dead drop at a hotel in Newark, California.


The source wrapped a memory card in a book, which he put in a bag marked "Ed," and left at the front desk of the hotel, according to the complaint.

Less than an hour later, Peng was seen picking up the package at the hotel. The next day, he flew to China with the disk.

And in another dead drop caught on a hidden video, Peng is seen taping an envelope with $20,000 to the inside of a drawer at a hotel room in Georgia, in exchange for another memory disk.

Following the complaint's unsealing on Monday, John C. Demers, assistant Attorney General of National Security, told NBC News that the Chinese have become "the No. 1 intelligence threat to the United States."

"No question. The Russians are up there for sure, but the Chinese are number one," he added.