Robert Levinson, 65, traveled to the Iranian island of Kish in 2007 to investigate corruption.
After he was abducted, the CIA told Congress that the agency did not have a current relationship with Levinson, and that he did not go to Iran on business.
But months later, emails surfaced that indicated that Levinson had gone to the CIA under orders from analysts who did not have the right to direct overseas operations, the Washington Post reported.
The discovery led to an investigation, and the CIA concluded that it was responsible for Levinson when he was in Iran, former U.S. intelligence officials told the Post under the condition of anonymity.
Ten employees were disciplined and the CIA paid Levinson's family an additional $120,000.
The whereabouts of Levinson remain unknown. His family last received a video and pictures of him three years ago that show him shackled and dressed in an orange jumpsuit.
"I have been held here for 31 / 2 years," he said in the video. "I am not in good health."
Levinson's family released a statement Thursday asking the U.S. government to take a more active role in finding him.
"It is time for the U.S. government to step up and take care of one of its own. After nearly 7 years, our family should not be struggling to get through each day without this wonderful, caring, man that we love so much," the statement said.
The National Security Council declined to comment on Levinson's potential ties to U.S. government, the Post said.