The man allegedly described how he had been sent on a mission by Pakistani intelligence services to relocate bin Laden and his family to a small compound in Bilal, Abbottabad.
A letter sent by Mr Lee's lawyers to FBI director James Comey in August claims Mr Lee subsequently shared this information with FBI agents.
But despite "numerous attempts" to claim his reward after bin Laden’s death in 2011 he received no response.
"Mr Lee precisely identified the whereabouts of the most notorious terrorist of our era," said the letter.
"A man responsible for the World Trade Center attacks, the most devastating act of terror committed on American soil, and numerous other assaults on Americans."
Mr Lee told The Grand Rapids Press in an email on Friday that he did not understand why the government waited to act for eight years.
"It disturbs me, and it should disturb every American, that I told them exactly where bin Laden was in 2003, and they let him live another eight years," he said in the email.
Mr Lee, who became Lord of Stanbury Manor in England in 1997 after purchasing the title, claims to have provided the FBI with intelligence before, and said the lack of action surprised him.
"For 20 years I was used to the government acting immediately on my intelligence," he said.
During their hunt for bin Laden, US authorities offered the reward to anyone who supplied information that led to bin Laden's capture or conviction.
The FBI has so far refused to comment.
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