Noshir Gowadia was accused of pocketing at least $110,000 from China, which he allegedly used to pay the mortgage on a multimillion-dollar oceanview home he built on Maui's north shore.
Gowadia, who has been in federal custody since October 2005, faces life in prison when he is sentenced in November.
The 66-year-old gave China a design for a cruise missile component and then showed its effectiveness when compared to United States' air-to-air missiles, according to federal prosecutors.
"This verdict sends a very clear message that no, you can't do that, and we can take care of our business here in American courtrooms when that happens," Assistant U.S. Attorney Ken Sorenson said.
Gowadia's defense attorneys argued during the nearly four-month trial that while it's true he gave China the design for the cruise missile exhaust nozzle, he based his work on unclassified, publicly available information. Gowadia plans to appeal.
"Mr. Gowadia is obviously disappointed with the verdict. He felt that he hadn't committed a crime," said his attorney Birney Bervar.
Gowadia was convicted on 14 of 17 counts, including conspiracy, violating the arms export control act, tax evasion and money laundering. He was acquitted on charges of knowingly communicating national defense information.
The decision came after six days of deliberations at a federal court in Honolulu.
"Mr. Gowadia provided some of our country's most sensitive weapons-related designs to the Chinese government for money. Today, he is being held accountable for his actions," said Assistant Attorney General David Kris. "This prosecution should serve as a warning to others who would compromise our nation's military secrets for profit."
Gowadia helped design the propulsion system for the B-2 bomber when he worked at Northrop Corp., now known as Northrop Grumman Corp., between 1968 and 1986.
Prosecutors argued that Gowadia helped China design a cruise missile exhaust nozzle that would give off less heat, allowing the cruise missile to evade infrared radar detection and U.S. heat-seeking missiles.
They said Gowadia traveled to China between 2003 and 2005 while designing the cruise missile and used e-mail to arrange payment for his work.
Gowadia's defense attorney, David Klein, told jurors it was true the engineer designed an exhaust nozzle for China. But he said Gowadia's design was "basic stuff" based on information that was already publicly available.
Prosecutors also charged Gowadia with attempting to sell classified stealth technology to the Swiss government and businesses in Israel and Germany.
During the trial, prosecutors presented evidence that Gowadia used three foreign entities he controlled, including a charity purportedly for the benefit of children, to disguise the income he received from foreign countries.
Born in India, Gowadia moved to the U.S. for postgraduate work in the 1960s and became a U.S. citizen about a decade later. He retired from Northrop for health reasons in 1986, two years before the B-2 made its public debut.
He moved to Maui in 1999 from the U.S. mainland where he had been doing consulting work after retiring from Northrop.
The case is one of a series of major prosecutions targeting alleged Chinese spying on the U.S.
In March, Chinese-born engineer Dongfan "Greg" Chung was sentenced to more than 15 years in prison after he was convicted of six counts of economic espionage and other federal charges.
Investigators learned about Chung while probing Chi Mak, a defense contractor engineer convicted in 2007 of conspiracy to export U.S. defense technology to China. Mak was sentenced to 24 years in prison in 2008.