David Carmel, 32, lost his post as a ship supply officer on the USS Shrike after it was discovered that he ordered hundreds of unneeded parts.
The grand jury indictment was handed down against Carmel on Thursday, only weeks after he was accused by U.S. prosecutors in New York of selling stolen military equipment. Carmel was due in federal court on Monday.
The indictment said the machine guns were found on Carmel's property in Gilman, along with boxes of gun parts, artillery shells, grenades and a rocket launcher, authorities said. None of these items were properly registered. Gilman is located about 120 miles east of Minneapolis.
The charges filed in New York by prosecutors on May 21 accuse Carmel of selling stolen U.S. military laser targeting devices and machine gun parts to an undercover agent.
The charges also say Carmel purchased hundreds of unneeded laser sights, machine gun barrels, night vision goggles and machine gun parts for the minesweeper USS Shrike. He was soon after relieved of job as a supply officer, and later left the Navy in November 2005.
Neither the New York nor the Wisconsin complaint says what became of the equipment Carmel ordered. But he told investigators in jail that he moved gun barrels and ammunition to Wisconsin when he left the military and also bought machine gun barrels from commercial sources.
Carmel was arrested May 30 in Chippewa County by the local sheriff's department.
Captain Eugene Gutsch of the Chippewa County Sheriff's Department told FOXNews.com that Carmel was arrested during a traffic stop.
"We were part of the seizure of the military weapons he had," said Gutsch.
He said that during the arrest, numerous items were found that were actually pieces of automatic weapons. Carmel did not resist arrest and he spent a short time in the county jail before being transported to a federal court in Minneapolis, Gutsch said.
Carmel's attorney, T. Christopher Kelly, didn't return a message seeking comment.
Both complaints say the case began last year when federal agents discovered someone selling military scopes on the Internet. They tracked the account to Carmel's father, who gave his son's phone number to an undercover agent.
The U.S. attorney's office in New York didn't return a message inquiring about the status of that case.
FOXNews.com's Adam Riback and The Associated Press contributed to this story.