Mr Lee, also known as Zhen Cheng Li, served in the US Army from 1982-86, say court documents.
He began his CIA career in 1994 as a case officer trained in covert communications, surveillance detection, recruitment, and the handling and payment of assets (agents or informants), among other duties. He was given top secret clearance and signed several non-disclosure agreements.
They contained handwritten notes on details such as "true names and phone numbers of assets and covert CIA employees".
Mr Lee left the US in 2013 after being questioned on five occasions by FBI agents. He never mentioned his possession of the books containing classified information, say the court documents.
He has only now been detained while on another visit. It's unclear whether he knew he was still under suspicion.
What has he been charged with?
The justice department says that Mr Lee, 53, has been charged "with unlawful retention of national defence information and faces a maximum penalty of 10 years in prison, if convicted".
He has not been charged with espionage, which can carry the death penalty - with some reports suggesting the US may not want to reveal secret information in court or that the FBI has struggled to struggled to gather the quality of evidence required to make a case for such a charge.
The court documents make no mention of any covert link between Mr Lee and the Chinese state, but sources close to the investigation say this is the suspicion.
Mr Lee appeared in Brooklyn federal court on Tuesday after being arrested at JFK. He is being held there while awaiting transfer to Virginia, where a federal court has brought the charges against him.
Is this case unusual?
If Washington's reported suspicions are correct, this case has had enormous repercussions. Some 18-20 informants may have been killed as part of China's attempts to dismantle the US intelligence operation on its soil.
But it's only the latest chapter in a long saga of espionage and counter-espionage between the US and China - one, say analysts, that should not be eclipsed by the focus on Russian covert activities.
Tech giants have been banned from both countries amid concerns about industrial espionage.