A criminal complaint unsealed in federal court in Virginia accuses James Fondren Jr. of conspiring to relay classified information to a foreign agent.
Authorities say Fondren was involved for years in what spy-hunters call a "false flag" operation - believing he was feeding information to one government, when in fact his handler was working for another country.
Court papers charge that Fondren, 62, provided information to a friend named Tai Shen Kuo, a naturalized U.S. citizen from Taiwan who lived primarily in Louisiana.
FBI investigators say that unbeknownst to Fondren, Kuo was taking orders from the Chinese government. Officials say Fondren believed the information was being sent to Taiwan.
Between 2004 and 2008, Fondren gave Kuo classified information through "opinion papers" he sold to Kuo for between $350 and $800 apiece, officials charge. Eight of the papers allegedly contained classified information, according to investigators.
Fondren worked at the Pentagon, holding top secret clearance as the deputy director of the Washington liaison office for U.S. Pacific Command. He has been on administrative leave since February 2008.
Fondren surrendered to authorities Wednesday. He faces a maximum of five years in prison if convicted.
Kuo and a former Defense Department employee, Gregg Bergersen, were arrested in February 2008 on espionage charges. Bergersen and Kuo have both pleaded guilty to conspiracy in the case.