After spending a week in jail, Texas financier Allen Stanford pleaded not guilty on Thursday to 21 criminal charges that he ran a $7 billion Ponzi scheme.

The once high-flying billionaire and sports promoter has been in federal custody since June 18, when he surrendered to the FBI in Virginia after a Houston grand jury indicted him on 21 counts of conspiracy, fraud and obstruction of justice.

U.S. Magistrate Judge Frances Stacy has yet to rule on whether Stanford must remain behind bars while he awaits a trial that is set to start on August 25.

Not guilty, Your Honor, said Stanford, 59, wearing an orange jump-suit and with his hands manacled in front of him. The Texas native could face life in prison if convicted of the charges.

Stanford is the second high-profile fraud case to shake public confidence in Wall Street and the U.S. financial regulatory system, after veteran financier Bernard Madoff pleaded guilty to a massive Ponzi scheme that could have cost investors as much as $65 billion.

Stanford is taking the anti-anxiety drug Ativan after initially turning to alcohol to deal with the stress of the case, his criminal attorney said in a filing.

Stanford was ushered into the Houston courthouse early on Thursday after spending a week in detention centers in Virginia and recently in Conroe, Texas, about an hour's drive north of Houston.

According to the U.S. Securities and Exchange Commission, Stanford, with the help of executives at his firm and a top Antigua and Barbuda financial regulator, ran a massive Ponzi scheme for over a decade that centered on certificates of deposit in his bank in Antigua.

On Thursday, the island nation's authorities arrested the country's former chief financial regulator, Leroy King, after the U.S. government last week filed criminal charges against him. A related SEC civil case accused him of taking bribes from Stanford in the form of over $100,000 in cash, Super Bowl tickets and access to Stanford's fleet of private aircraft.

A U.S. official said the government will seek to extradite Leroy King to the United States to stand trial.

Laura Pendergest-Holt, the former chief investment officer for Stanford Financial Group, charged with obstructing the SEC's investigation of Stanford, pleaded not guilty on Thursday.

Two accountants accused by the U.S. government of helping Stanford falsify records -- Gilberto Lopez and Mark Kuhrt -- also pleaded not guilty.

Stanford says he is innocent of the charges and that his multinational business was legitimate until the SEC disemboweled it by filing civil charges, which led to the confiscation of all his assets by a court-appointed receiver.

According to Dick DeGuerin, Stanford's criminal attorney, his client is not a flight risk, and the government should not force him to take a perp walk, where the accused is paraded in manacles in front of television cameras.

The U.S. government argued in a filing that Stanford was a serious flight risk because he had the means and the motives to flee the country rather than face life imprisonment.

About $1 billion in investors' deposits in the Antigua bank are still missing, and investigators have found $20 million in a Swiss bank account that was not documented in company records, the Justice Department said.

Stanford has an international network of wealthy acquaintances who could assist him and has experience using private jets at a moments' notice, the department said in a filing.

(Additional reporting by Eileen O'Grady and Bruce Nichols in Houston and Pascal Fletcher in Miami; Writing by Chris Baltimore; Editing by Tim Dobbyn, Toni Reinhold, Phil Berlowitz)

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