SAN FRANCISCO (CBS SF/AP) — Former Hayward tour operator Xuehua Edward Peng was sentenced to four years in federal prison Tuesday for acting as an agent of the Chinese government in connection with a scheme to conduct pickups known as “dead drops” and transport digital cards to China, federal prosecutors said.
Peng — whose full name is Xuehua Edward Peng — has pleaded guilty to his role in the scheme last November. U.S. District Judge Haywood S. Gilliam delivered the sentence on the plea agreement on Tuesday.
The plea agreement will also require Peng to pay a $30,000 fine.
Peng, 57, a naturalized U.S. citizen, has been in federal custody since late September, when he was arrested at his Hayward residence to the surprise of neighbors, who knew him as a nice person with a taste for luxury cars.
Prosecutors said Peng, under orders from a handler in China, left cash in hotel rooms in exchange for classified national security information on small electronic storage devices.
The U.S. was never at risk since the information left for Peng was provided by an FBI double agent who had also been approached for spy-work by the Chinese government but decided to inform the U.S. government instead, prosecutors have said.
In the plea agreement, Peng said he was approached by a state security official with China during a business trip in 2015 and agreed to collect and deliver information. He made six trips between 2015 and 2018, leaving as much as $20,000 in envelopes at a time.
“I was never informed of the contents of these devices and at no time learned what information was stored on them,” Peng said in the plea agreement.
Peng was paid “at least $30,000 for the acts” he performed as a courier, according to the agreement. Communications were done by telephone at first and then by the encrypted chat platform WeChat.
A seventh drop scheduled for August 2019 was delayed. Peng was arrested the next month.
Investigators described him as a sightseeing operator in the Bay Area for Chinese visitors and students. Public records list Peng as president of U.S. Tour and Travel in San Francisco, but no website for the company was found.
Peng entered the country in 2001 on a temporary business visa. He became a lawful permanent resident in 2006 following his marriage and was naturalized in September 2012.
He has a background in mechanical engineering and is licensed in California as an acupuncturist.