FBI files espionage charges against California man who allegedly spied for China

Xuehua Edward PengThe United States has pressed espionage charges against a naturalized American citizen who operated as a courier for Chinese intelligence while working as a tour operator in California. On Monday federal prosecutors in San Francisco filed espionage charges against Xuehua “Edward” Peng, a 56-year-old Chinese-born American citizen. Peng, a trained mechanical engineer, reportedly entered the United States in June 2001 on a temporary visa. In 2012 he became a naturalized American citizen. By that time he was working for US Tour and Travel, an independent tour operator in California.

On Friday, officers with the Federal Bureau of Investigation arrested Peng at his home in Hayward, California, and charged him with spying on behalf of the Ministry of State Security (MSS), which is China’s primary external intelligence agency. At a press conference held on Monday, David Anderson, US Attorney for the Northern District of California, said that Peng began working for the MSS in June 2015 and continued to do so until June of 2018. Throughout that time, Peng participated in at least six dead drops on behalf of the MSS, said the FBI. But he was unaware that the agent on the other end of the dead drop was in fact an FBI informant, who had lured Peng and the MSS into an elaborate sting operation. The informant is referred to in the indictment as “the source”. The FBI said it paid the informant nearly $200,000 to facilitate the sting operation.

Most of the dead drops took place at a hotel in Newark, California. Peng would book a room in the hotel using a popular online booking service. He would check in and go to his hotel room, where he would hide envelopes containing as much as $20,000 in cash. He would then leave the room key at the front desk for his contact to pick up. The contact (the FBI informant) would pick up the key and the cash, and leave memory sticks with classified US government information for Peng to pick up. Peng would then travel to China to deliver the classified information to the MSS.

Unbeknownst to Peng, the FBI was monitoring him all along, and managed to secretly tape his alleged espionage activities. The surveillance footage is now part of the federal affidavit that was unsealed on Monday. Moreover, the FBI appears to have given Peng classified information that was approved for the purposes of the counterespionage operation against him. It is not known whether the classified information was real, deceptive, or a mixture of the two. It is worth noting that Peng is not a foreign diplomat and is therefore not subject to the rules of diplomatic immunity. He now faces a maximum of 10 years in prison and a fine of up to $250,000 if convicted.

Author: Joseph Fitsanakis | Date: 01 October 2019 | Permalink

MI5 arrests Royal Navy petty officer for trying to spy for Russia

Edward DevenneyBy JOSEPH FITSANAKIS | intelNews.org |
An member of the British Royal Navy has been arrested in a counterintelligence sting operation, after trying to sell top-secret government documents to people he believed were Russian operatives. Petty Officer Edward Devenney, who has been in the Royal Navy for over a decade, was arrested earlier this week while meeting with two MI5 officers posing as Russian spies. Originally from Northern Ireland, Devenney, 29, appears to have been motivated by disgruntlement against the Navy, after his planned promotion to commissioned officer was halted due to financial austerity measures imposed on the military by the British government. According to the court indictment, Devenney contacted an unnamed “embassy of a foreign country” in London, offering to provide classified information in exchange for money. It is unknown at this point how exactly MI5, the British government’s foremost counterintelligence organization, became privy to the content of Devenney’s communication with officials at the unidentified embassy. What is known is that, after several messages were exchanged between the parties, Devenney arranged to meet two people he believed were Russian government employees. In reality, the two individuals were MI5 officers, who were able to film the clandestine meeting. Devenney was apparently arrested on the spot, having first announced that he wished to “hurt the Navy” because his promotion to a commissioned officer had been “binned” by the British government. Read more of this post

News you may have missed #638 (analysis edition)

Dominique Strauss-Kahn

Strauss-Kahn

►►What really happened to Strauss-Kahn? Earlier this year, Dominique Strauss-Kahn lost his political career and his job as head of the International Monetary Fund after he was indicted in New York on sexual assault charges, which were later dropped. But investigative journalist Edward J. Epstein alleges that the French politician may have been the target of a deliberate attempt to destroy him as a political force. His allegations relate to a missing BlackBerry phone which is said to have been hacked by Strauss-Kahn’s political rivals.
►►Spy game revs up with Arab Spring. A broad –perhaps too broad– primer on espionage and intelligence operations in the Middle East, with quotes by several academics and former intelligence operatives. Parts of it are probably too basic for intelNews regulars, but worth a look nonetheless.
►►Why is UK police not investigating Climategate? The UK police force tasked with investigating the hacking of emails and documents from the Climatic Research Unit at the University of East Anglia (the debunked “Climategate“), seems to have quietly de-prioritized its investigation. According to documents released under the UK Freedom of Information Act, the amount spent on attempts to identify the hacker in the last year was just £5,649.09 (less than $8,000), suggesting police work on the investigation has ground to a halt.

Expelled Israeli spy was after Russian-Arab arms deals, says FSB

Vadim Leiderman

Vadim Leiderman

By IAN ALLEN | intelNews.org |
The military attaché at the Israeli embassy in Moscow, who was unceremoniously expelled by the Russian government last week, was allegedly gathering intelligence on Russian arms exports to the Arab world. The FSB, Russia’s foremost counterintelligence agency, said Soviet-born Vadim Leiderman, a colonel in the Israeli army, was “caught red-handed” during a sting operation in Moscow, which is said to have occurred on May 12. His arrest led to the first expulsion of an Israeli diplomat from Russia in over two decades. Commenting on the case, a spokesperson from Russia’s Ministry of Foreign Affairs said that the Kremlin had intended to conceal Leiderman’s expulsion from the media, as a “gesture of goodwill” to Israel. But its effort to keep the operation secret collapsed after Russia’s RBC TV aired a surveillance video of Leiderman’s arrest by a group of FSB officers, as the seemingly unsuspecting Israeli diplomat was dining with another man at an exclusive Moscow restaurant. Read more of this post

News you may have missed #0156

  • NGOs worry African spy services. A memo authored by African spy service representatives at the third annual conference of the Committee of Intelligence and Security Services of Africa (CISSA), has acknowledged what most intelligence services in developing countries already know: that many “volunteers” of Western non-governmental organizations (NGOs) are in fact intelligence operatives using their NGO status as a cover.
  • Nozette admitted guilt in fraud charges last January. New information shows that Stewart D. Nozette, who was arrested and charged last week under the US Espionage Act, pleaded guilty in January to overbilling NASA and the Pentagon more than $265,000 for consulting services.

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Dozens of MI5 agents to testify in Real IRA trial

RIRA gunmen

RIRA gunmen

By IAN ALLEN | intelNews.org |
Over 30 agents of MI5, Britain’s primary domestic intelligence agency, will be anonymously giving evidence at a scheduled trial of three men arrested in connection with a Real IRA international gun smuggling operation. The men, Paul Anthony John McCaugherty, Dermot Declan Gregory, and Desmond Paul Kearns, all from County Armagh in Northern Ireland, were arrested after a yearlong infiltration operation by MI5, involving the use of informants and surveillance equipment. The latter resulted in nearly 90 hours of recorded conversations, which the court said will take “months to transcribe”. Additionally, 35 MI5 agents have so far applied to give evidence in court, their identity concealed behind screens. Read more of this post

News you may have missed #0094

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