B-2 stealth bomber engineer Noshir Gowadia is charged with 17 counts of espionage, conspiracy, money laundering and tax offences.
According to prosecutors, 62-year-old Gowadia sold classified US defence secrets about the sophisticated B-2 stealth bomber to China for less than USD 85,000.
However, defence attorney argued that US Air Force had already released the information and it was not a secret.
Assistant US Attorney Kenneth Sorenson said Gowadia was "desperate" for money when he approached the Chinese government in 2003, offering to sell them top-secret American stealth technology used to block detection of missiles and warplanes.
Sorenson further said, "Gowadia made multiple visits to China in 2004 and 2005 and was paid almost $84,000 for information and design work he provided, laundering the money through nonprofit foundations in Lichtenstein and bank accounts in Switzerland."
Sorenson said Gowadia first came under an FBI intelligence investigation in 1999 based on suspicions that he might be trafficking in technology.
"The probe turned criminal in nature after customs agents secretly searched Gowadia's luggage and laptop computer when he was travelling to China in 2004," according to the prosecutor.
FBI and Air Force agents searched Gowadia's palatial Maui home in Oct 2005 and he was indicted on multiple federal criminal charges in Nov 2005.