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Judge sentences man convicted of acting as People’s Republic of China agent

A Hayward resident was sentenced in federal court in Oakland Monday to four years in prison for acting as an agent of the People’s Republic of China.

Xuehua Peng, also known as Edward Peng, 56, acted as a courier by picking up digital memory cards hidden in hotel rooms in Newark, Oakland and Georgia and flying with them to Beijing on five occasions between 2015 and 2018, according to court documents.

In four of the transactions, known as “dead drops,” he left payments of $10,000 or $20,000 provided by China for the unnamed person who left the cards.

The unnamed collaborator was actually a double agent working for both China and the United States. All of the transactions as well as a preliminary test run at a Newark hotel were surveilled and in some cases videotaped by the FBI, and the information on the cards was carefully chosen by the government, according to a criminal complaint filed in September.

FBI agent Spiro Fokas wrote in the complaint:

“At all times, the government carefully selected the classified information for the Source and were aware of the materials that the Source passed.”

Peng pleaded guilty before U.S. District Judge Haywood Gilliam in November to one count of acting as an agent for a foreign government without notifying the U.S. attorney general. He was sentenced by Gilliam, who also imposed a fine of $30,000, the amount that Peng admitted being paid by the Chinese government.

The four-year sentence was agreed to by the prosecution and defense when Peng pleaded guilty.

Defense attorney Edward Swanson wrote in a sentencing brief that Peng “deeply regrets his actions.” Peng was raised in China and has degrees in mechanical engineering and traditional Chinese medicine. He migrated to the U.S. in 2000 and became a citizen in 2012, according to the brief.

Peng admitted in his plea agreement that he was recruited by a Chinese official during a business trip to China in 2015, according to U.S. Attorney’s Office spokesman Abraham Simmons.

In several of the dead drops, Peng taped an envelope containing the $10,000 or $20,000 to the underside of a drawer in the hotel room. He then departed and left a key for the double agent at the front desk. Within a few hours, the agent would pick up the money and leave a memory card, which would then be retrieved by Peng, according to the complaint filed in September.

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