IT was a former Icelandic beauty queen who scooped the $A2.1 million reward for tipping off the FBI to the whereabouts of feared Boston gangster James "Whitey" Bulger, it has been revealed.

In this courtroom sketch, James "Whitey" Bulger stands during his initial appearance in a federal courtroom in Boston in June. Source:AP

Bulger, who is charged with 19 murders in the 1970s and '80s in Boston, was arrested in June in Santa Monica, California, where he had been living under an assumed name with long-term girlfriend Catherine Greig.

The FBI has steadfastly refused to disclose the identity of the tipster, again declining to comment to AFP, but the Boston Globe says it was Anna Bjornsdottir, a 57-year-old graphic designer and yoga instructor.

Bjornsdottir, who was crowned Miss Iceland in 1974 and starred in that year's Miss Universe competition, tipped off police after recognising Bulger, 81, on the television news, reports said.

She is said to have befriended Greig, 60, in Santa Monica after the two women took a shared interest in a local stray cat.

The Boston Globe reported that Bjornsdottir, star of B-movies More American Graffiti and The Sword and the Sorcerer, moved to the LA area in the late 1970s with her first husband, rock star Jakob Magnusson.

Bulger, an Irish-American whose life inspired a gritty Hollywood movie, pleaded not guilty to the string of murder charges at a court appearance in July.

Police found some $A823,000 in cash and a "fairly big arsenal" of weapons in Bulger's modest apartment after his arrest, law enforcement sources said.

Greig, who is accused of helping to shield Bulger during his time on the run, was indicted by a federal grand jury and faces up to five years in prison and a $US250,000 fine if convicted.

Bulger was the inspiration for Jack Nicholson's character in The Departed, the 2006 crime film directed by Martin Scorsese and also starring Leonardo DiCaprio and Matt Damon.

Bulger and Greig had lived for years under the pseudonyms Charles and Carol Gasko.

In addition to accusations that Bulger murdered mob rivals, potential witnesses and others who threatened him, prosecutors accuse him of a crime spree spanning into the 1990s that included extortion, money laundering and, at one point, running guns to Northern Ireland's IRA militants.