A federal judge denied bail to a Bay Area tour guide charged with ferrying classified U.S. secrets to Chinese intelligence, underscoring Beijing’s aggressive reach on American soil.

U.S. Magistrate Judge Jacqueline Corley ruled Wednesday that Xuehua Edward Peng posed a flight risk and blocked his release, citing deep ties to China that outweighed family roots in California. She also denied him future use of a public defender after finding he had the money to hire his own lawyer.

Peng, a San Francisco-area tour operator who guided Chinese tourists, faces charges that he acted as a courier for Chinese intelligence. Prosecutors say he retrieved classified national security information through dead drops and carried it to Beijing between 2015 and 2018. If convicted, he faces up to 10 years in prison and a $250,000 fine. He has not entered a plea.

CBS News reported the bail denial from the San Francisco federal proceeding and detailed how authorities built the case with an FBI double agent, hotel-room surveillance, and intercepted calls with handlers in China.

Dead drops, cash, and flights to Beijing

Court documents describe a classic spy operation dressed up with digital tools. Peng allegedly worked at the direction of Chinese intelligence officials, picking up secure digital cards holding classified U.S. national security information and leaving cash for the source who supplied them.

The exchanges happened in hotel rooms across the Bay Area, Newark and Oakland, and in Georgia. In one Georgia hotel room captured on surveillance video, Peng taped what investigators said was $20,000 in cash to a dresser. The source was supposed to leave an SD card in return. In reality, a double agent working for the FBI left the card.

The New York Post reported that Peng, 56, a naturalized U.S. citizen, served as the courier between U.S. sources and Ministry of State Security officials in Beijing. He did not steal the material himself. He moved it.

Prosecutors said he made multiple trips of this kind from 2015 through 2018. After collecting the cards, he flew them to China. Authorities noted he traveled between the Bay Area and China 15 times since 2015.

Cases like this sit alongside other recent examples of covert foreign activity on U.S. soil, including an American journalist sentenced for acting as an unregistered Chinese agent.

Judge cites China ties over Bay Area family

At the bail hearing, Assistant U.S. public defender Ellen Leonida argued Peng had almost no criminal record, only an illegal crabbing infraction, and was ready to post property. She asked for monitored home confinement so he could stay with his wife and two young daughters.

Judge Corley was not persuaded. Prosecutors told the court that Peng and his wife had just closed on a new home in Castro Valley. That did not settle the flight-risk question.

Corley pointed straight at Peng’s overseas connections.

U.S. Magistrate Judge Jacqueline Corley said:

"He has substantial ties to China including Chinese government,"

She added:

"He also has personal ties."

Prosecutors told the judge he maintained a bank account, an apartment, and a mistress in China. Those facts, paired with frequent travel and the nature of the charges, drove the detention order. The judge also ruled his financial resources made him ineligible for continued public-defender help.

Similar patterns of Chinese nationals moving through California under false pretenses have drawn federal charges before, including cases where travelers arrived with other people’s passports.

FBI sting ran for years

A double agent penetrated the ring in the Bay Area in 2015 and was directed to Peng. From there, the FBI filmed the drops and intercepted phone conversations with handlers in China. The operation stretched across several years and multiple states before the arrest at Peng’s San Francisco-area home.

Fox News reported prosecutors said Peng made at least five cash drops of up to $20,000 each in hotel rooms between October 2015 and June 2018, then traveled to Beijing to meet Chinese intelligence officers. The drops occurred in the Bay Area and Columbus, Georgia.

U.S. Attorney David Anderson framed the case as both old-school tradecraft and modern tech.

U.S. Attorney David Anderson said:

"The conduct charged in this case alleges a combination of age-old spycraft and modern technology,"

Anderson continued:

"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."

Neighbors in the Hayward area described Peng as quiet and unassuming, the kind of cover that lets a courier operate in plain sight while guiding tourist groups through San Francisco.

Fourth Chinese espionage case in months

Former acting CIA Director Mike Morrell placed the arrest in a wider pattern.

Mike Morrell, former acting director of the CIA, said:

"This arrest is the 4th case we've seen of Chinese espionage just in the last several months. I think it's both a reflection of how aggressive the Chinese are being and how aggressive we are being in trying to push back on it,"

That pushback matters. Beijing’s intelligence services have shown they will use everyday professionals, tour guides, academics, business people, to move secrets. The dead-drop method, the cash, the SD cards, and the repeated flights form a clear operational picture when the evidence is laid out in court.

Political figures have faced their own scrutiny over alleged Chinese intelligence contacts, including reporting on how Eric Swalwell allegedly sought to block FBI files on a suspected Chinese spy.

Foreign-linked threats also extend beyond human couriers. Recent cyberattacks on water systems across multiple states show how state-backed actors probe critical infrastructure while traditional spy cases continue in federal courtrooms.

Peng remains in custody. The government says the classified material he allegedly moved related directly to U.S. national security. The complaint does not spell out the exact subject matter of every card, but the charge itself, acting at the direction of Chinese intelligence to obtain and transport that material, carries the weight the judge cited when she refused to let him walk free.

When a tour guide can run dead drops for years across California and Georgia, then hop flights to Beijing with classified cards, the open question is not whether China is probing for secrets. It is how many other quiet professionals are still doing the same work while the public looks the other way.