Chinese spy used Priceline.com to book travel
A Chinese spy — codename Ed — used Priceline.com to book his travel across the United States as he collected parcels and delivered cash to a double agent, according to a federal affidavit unsealed Monday.
The details of Xuehua Peng's spycraft read at times like a script for film noir or a spy thriller. He would make "dead drops" of packages at the front desks of hotels or tape the parcels inside cigarette boxes inside the dresser drawers of hotel rooms. He was always a step ahead, or behind, his contact, a double agent identified only as "The Source" said. He flew business class to China to meet with officers of the Ministry of State Security, China's chief intelligence and counterintelligence service.
But to book his travel, Peng used Priceline.com.
He booked a flight from Oakland, California, to Atlanta on Dec. 28, 2016, and he booked a hotel room in Columbus, Georgia, during his stay. The FBI ended up with copies of his booking confirmations.
"Based on my training and experience, I believe PENG traveled conducted this visit to Hotel #3 to confirm it was a suitable location for further dead drops from the Source, who complained to the MSS that San Francisco was too far," the affidavit states.
Priceline.com, which has been offering travel deals online for more than 20 years, declined to comment.
FBI Director Christopher Wray has said China poses a more serious counterintelligence threat to the United States than any other country, including Russia. In July, he testified before a Senate panel that the FBI had more than 1,000 investigations involving economic espionage and attempted intellectual property theft, nearly all of which lead back to China.
According to the allegations, Peng conducted numerous dead drops here in the United States on behalf of Chinese intelligence officers and delivered classified information to them in China. His arrest exposes and disrupts an operation by those Chinese intelligence officers to collect such information without having to step foot in this country.
The Justice Department has brought multiple cases in the past year involving Chinese espionage and has also brought charges against operatives working with China's Ministry of State Security as law enforcement officials grapple with how to deal with an increasing threat of China trying to steal information from American companies.
Last October, prosecutors charged a Chinese spy with attempting to steal trade secrets from several American aviation and aerospace companies, the first time an MSS operative was extradited to the U.S.
Earlier this year a New York woman named Ying Lin – who worked for Air China – pleaded guilty to working as an agent for the Chinese government by placing unscreened packages on Beijing-bound flights as mandated by Chinese military personnel stationed at China’s permanent UN mission, according to FOX News. Last October, the Justice Department unsealed new charges against 10 Chinese hackers and officers, accused of taking part in a years-long and broad scheme aimed at stealing secrets and tradecraft from various fields.
But the charges announced against Peng on Monday presented a unique perspective on China's espionage efforts in the United States. Peng is a naturalized citizen and he works as a guide for a company that offers tours to Chinese students and visitors to the United States.
“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 and the battle being waged by our intelligence and law enforcement communities to protect our people, our ideas, and our national defense," U.S. Attorney David L. Anderson said in a prepared statement.
During some six occasions between 2015 and 2018, Peng would secure a hotel room using "Ed" as his codename and leave up to $20,000 there, authorities said in the criminal complaint. The double agent would then get a key to the room, take the cash and leave a digital card containing information, it said.
Peng would then take the card and travel to Beijing to meet Chinese intelligence officers, authorities said.
Authorities say the unnamed double agent went to the FBI in 2015 after China’s intelligence department tried to recruit the person as a spy.
The criminal complaint says Peng is a naturalized U.S. citizen who entered the country on a temporary business visitor visa and became a permanent resident in 2006. Peng was naturalized in September 2012.
He holds an acupuncturist license from the state.
Peng was arrested at his home Friday and ordered held without bond at a hearing before U.S. Magistrate Judge Joseph C. Spero. He is scheduled to return to court Wednesday.
Court records indicate Peng will be represented by the federal public defender’s office. The office did not immediately respond to a voicemail seeking comment.
If convicted, he could face up to 10 years in prison and a $250,000 fine.
This report contains material from the Associated Press.
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