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The Federal Bureau of Investigation has claimed that Fai and Zaheer Ahmad had channelled million of dollars from Pakistan's spy agency Inter-Services Intelligence to influence members of the US Congress on the Kashmir issue.
According to reports, Burton, who has been an outspoken advocate on behalf of the Pakistani claim to Kashmir, had received at least $ 10,000 in contributions from Fai since 1990, and at least $ 2,000 from Ahmad.
Burton said that he had known Fai for 20 years and "in that time I had no inkling of his involvement with any foreign intelligence operation".
"I had presumed our correspondence was legitimate," the Dawn quoted Burton, as saying.
Fai and Ahmad are accused of having conspired to act as agents of a foreign government without that interest being declared and falsifying, concealing and covering up the fact. Both are US citizens and face a prison sentence of five years if convicted.
Shortly before receiving a donation from both Fai and Ahmad, Burton had announced the formation of a Kashmir caucus in the US Congress. He has travelled to Kashmir for events sponsored by KAC and has spoken in favor of resolve the standoff between Pakistan and India over the territory in Pakistan's favour.
"Since 1948, the people of Kashmir have been offered and promised a plebiscite and that's something that has not happened. Here we are 61 years later, and we are still hoping that one day there will be peace and tranquility in that beautiful part of the world that I want to visit," Burton had said at an event in Islamabad in 2009.
"The number of Indian troops that are still up there and keeping everything under wraps. They are patrolling the streets and there are still some horrible tragedies that are taking place. I heard of gangraping of young women, I've heard of murders and tortures," he had added.