Khaled Abdel-Latif Dumeisi, 60, of Oak Lawn was arrested based on a dossier found in Baghdad in April and turned over to the FBI.
U.S. Attorney Patrick Fitzgerald said in a statement that Dumeisi had furnished information to Iraqi intelligence without registering as a foreign agent.
"Those who gather information in the United States about people living in America for the purpose of providing the information to hostile governments should understand that the FBI will pursue them vigorously," Fitzgerald said.
Federal law requires anyone acting as an agent of a foreign government who is not a member of that country's diplomatic service to register with the Justice Department as a foreign agent.
Dumeisi never did so, federal officials said.
They said members of the Iraqi National Congress, an opposition group, discovered a dossier in a Baghdad safehouse run by Iraq's intelligence service in the days when Saddam's regime was crumbling.
Federal officials said a preliminary translation of the dossier indicated that it contained Iraqi intelligence reports from an "agent/asset" in the United State code-named "Sirhan."
Officials said the code-name was that of Dumeisi.
Dumeisi has lived in the United States for about a decade and is a permanent resident alien, according to immigration records. Officials said he told them he is a Jordanian citizen born in Palestine.
Dumeisi was arrested based on a complaint that identifies him as the president and registered agent of a company that publishes an Arabic monthly periodical.
Among other things, Dumeisi was trained by Saddam's intelligence agents to use a pen with a hidden camera and microphone, according to federal officials. They said he used it to record an interview with a member of an Iraqi opposition group critical of Saddam.
According to the complaint, four unnamed cooperating individuals, including a self-described former Iraqi intelligence officer, also provided information concerning Dumeisi's activities. The three others were associated with his Arabic periodical.
FBI agents said Dumeisi was in contact with four people at Iraq's United Nations mission who were actually intelligence officers.
One of the four was expelled from the country by the State Department in June 2002 on suspicion of spying, the FBI said.
Dumeisi allegedly told an unnamed sources that he received $2,000 or $3,000 from Iraqi intelligence to help gather information on opposition figures living in the United States.