After spending a week in jail, Texas financier Allen Stanford sat in a Houston courtroom on Thursday waiting to face a U.S. judge who will decide whether he must remain behind bars while he awaits trial for an alleged $7 billion swindle.

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.

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, 59, a Texas native, could face life in prison if convicted of the charges.

Wearing an orange jump-suit and hands manacled in front of him, 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 north of Houston.

Stanford waited in a packed courtroom for U.S. Magistrate Judge Frances Stacy to rule on his request for bail. Stanford frequently glanced to the back of the courtroom and smiled at his family and friends in attendance.

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

Stanford acted with the help of top Stanford executives, as well as Antigua and Barbuda's former chief financial regulator, who encouraged U.S. investigators to look the other way, the SEC said.

The island nation's authorities on Thursday arrested Leroy King, after the U.S. government last week filed criminal charges against him and 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.

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.

Stanford has already offered to surrender to U.S. authorities three times, and was denied each time because the government did not have a warrant for his arrest.

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.

Three other former Stanford employees are also expected to appear separately on Thursday.

They are Laura Pendergest-Holt, the former chief investment officer for Stanford Financial Group, charged with obstructing the SEC's investigation of Stanford, and two accountants charged with helping him falsify financial records.

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