A man hid 63 pistols in his luggage on multiple trips to the UK, where he exchanged them for large cash payments, US court documents said.
A new indictment accuses American Steven Greenoe of 50 federal charges related to the weapons.
Greenoe, 37, of North Carolina, would buy the firearms, take them apart and disguise them as engineering samples and inert weapons before concealing them in his luggage, prosecutors said. He is said to have travelled at least eight times from Raleigh to the UK in 2010 and delivered the firearms to unnamed co-conspirators.
Greenoe was first charged last summer with attempting to illegally export 16 guns.
US homeland security secretary Janet Napolitano said last week the case was a topic of discussions during her visit to London.
US Attorney George Holding, who oversees the prosecution district in Raleigh, said he was troubled that Greenoe was able to take weapons on several trips without getting caught. He said investigators hoped to learn more about how he was able to do it.
"The magnitude of this case touches not only US citizens but our great British allies," Mr Holding said. "Our federal firearms laws were put into place to protect our citizens. However, our obligation as good neighbours is just as important to ensure that others are not harmed by individuals who break our firearms laws."
The case has already led to UK arrests in the Liverpool area, where two men accused of conspiring with Greenoe to supply the weapons were arrested on Tuesday, according to the Times. Police would confirm only that two men - 31-year-old Steven Cardwell and 32-year-old Neil Copplestone - had been charged with conspiracy to sell prohibited firearms and appeared in court on Thursday.
US prosecutors also accuse Greenoe of making false statements when acquiring the weapons, failing to provide notice to the airline that firearms were being transported and failing to obtain Department of State approval for firearms exports. Previous court documents show that Greenoe told investigators that he knew he was not supposed to bring the weapons in his luggage but was doing so to supply employees working on maritime security contracts abroad.
If convicted, each charge carries a maximum sentence of either five or 10 years in prison. A lawyer for Greenoe declined to comment.