A former currency trader extradited from Peru pleaded not guilty in U.S. District Court on Friday to criminal fraud charges stemming from a Ponzi scheme that prosecutors said lured some 400 investors into losing at least $5 million.

Jeffrey Lowrance, 50, was originally charged in 2009. He was indicted a year later on five counts of mail fraud, one count of wire fraud, and four counts of money laundering.

Lowrance was accused of fraudulently soliciting some $25 million in investments between 2004 and 2009, telling investors they would be paid monthly interest of as much as 7 percent. He made Ponzi-type payments to investors, and provided fraudulent account statements, according to the indictment, which was filed by the U.S. Attorney's Office for the Northern District of Illinois.

In a Ponzi scheme, promised investments are not made and money from new investors is used to pay off older investors.

Lowrance was ordered held pending a July 25th detention hearing. If convicted, he faces a prison sentence of up to 20 years on each of the federal charges.

The indictment seeks forfeiture of at least $5 million from him.

Little of the money Lowrance collected was invested in foreign-exchange trading, according to the indictment, and was instead misused for company expenses, to invest in unrelated business ventures, including a newspaper, and to benefit Lowrance, his family, and his associates.

Lowrance owned Mentor Investing Group Inc, which was originally based in San Diego and later in Panama City, Panama. He subsequently incorporated First Capital Savings & Loan Ltd in New Zealand, which took over Mentor's accounts.

He was arrested earlier this year in Lima, Peru, and extradited to the United States, arriving on Thursday. He had lived in Peru intermittently since 2004 and continuously since 2009, prosecutors said.

In other developments on Friday, the Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission filed separate civil enforcement actions against Lowrance and his businesses, prosecutors said.

(Reporting by Andrew Stern; Editing by Jan Paschal)