California man charged in elaborate Chinese spy operation

A California man has been charged with acting as an illegal foreign agent as part of an elaborate FBI sting operation targeting Chinese intelligence operatives working in the U.S., the Justice Department said Monday.

Edward Peng was caught acting as a courier for China’s Ministry of State Security (MSS) after the U.S. launched a “double agent operation” in March 2015, according to a criminal complaint obtained by NBC News.

As part of the investigation, a confidential FBI source met with MSS intelligence officers, provided them with classified information relating to national security concerns, and received financial payments in return, the criminal complaint says.

On six separate occasions, Peng showed up to collect packages left at hotels around the country, the criminal complaint says.

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The operation began after a March 2015 meeting in which an MSS intelligence officer set up a trial run for passing along classified information that involved placing an SD card in a book, wrapping it in a bag marked for “Ed” and leaving it at the front desk of a hotel in Newark, Calif.

Peng showed up in a silver Mercedes to collect the package on the day of the planned drop-off, June 13, 2015, the criminal complaint says.

Then, on Oct. 8, the source emailed his handler saying he would be traveling to San Francisco for sightseeing on Oct. 24 - a coded message indicating the source would be conducting a dead drop at the same hotel on that day, the complaint says.

The source left the package for "Ed" with a receptionist at 8:30 a.m. Peng was observed entering the hotel less than an hour later and leaving with the package in hand, the complaint says.

He flew to China the next day but returned to the U.S. and collected other packages at hotels in California and Georgie over the next several months, the complaint says.

Peng, who is believed to have been working as a sightseeing tour operator in the San Francisco area for Chinese students and visitors, arrived in the U.S. on a temporary business visa but became a naturalized citizen in Sept. 2012. He has a degree in mechanical engineering and is trained in traditional Chinese medicine, according to the complaint.