Texas billionaire R. Allen Stanford pleaded not guilty Thursday to charges he swindled investors out of $7 billion as part of a massive investment scam.

Stanford entered his plea during his arraignment in federal court. The financier was indicted on charges that his international banking empire was really just a colossal Ponzi scheme.

Laura Pendergest-Holt, Gilberto Lopez and Mark Kuhrt, three executives with the now defunct Houston-based Stanford Financial Group who were indicted along with their former boss, also entered not guilty pleas during the court hearing.

U.S. Magistrate Judge Frances Stacy set bond at $500,000. Two family members and a friend agreed to pay the bond but she delayed her decision to release him until Friday afternoon to give prosecutors time to appeal to the judge who will hear the case. Stanford has been in federal custody since he was arrested in Virginia on June 18.

At his bond hearing, prosecutors argued Stanford should be held without bond because he might have access to billions of dollars in secret funds.

The arraignment of Stanford and the three executives came a week after a Houston federal grand jury returned a 21-count indictment against them.

Stanford has for months denied allegations he defrauded investors.

He tried to turn himself in to federal authorities in the months before his indictment. But authorities couldn't take him into custody until charges were filed.

Stanford was returned to Texas on Tuesday. He was being held in the Montgomery County Jail in Conroe, located just north of Houston, according to his attorney Dick DeGuerin.

The most serious counts that Stanford faces carry prison terms of up to 20 years.

The billionaire and the executives are accused of orchestrating a massive fraud by misusing most of the $7 billion they advised clients to invest in certificates of deposit from the Stanford International Bank, based on the Caribbean island of Antigua.

Also indicted is Leroy King, the former chief executive officer of Antigua's Financial Services Regulatory Commission. He was taken into custody by island authorities and will now face extradition proceedings, according to a government official who spoke on condition of anonymity because she was not authorized to discuss the case. King is accused of accepting more than $100,000 in bribes to turn a blind eye to irregularities.

Stanford, Pendergest-Holt, Lopez, Kuhrt and King are charged with wire fraud, mail fraud, conspiracy to commit mail, wire and securities fraud and conspiracy to commit money laundering.

Stanford, Pendergest-Holt and King are also charged with conspiring to obstruct a Securities and Exchange Commission investigation and obstruction of an SEC investigation.

The indictment charged Stanford and the others with falsely claiming to have grown $1.2 billion in assets in 2001 to roughly $8.5 billion by the end of 2008. The operation had roughly 30,000 investors, officials said.

Investigators say even as Stanford claimed healthy returns for those investors, he was secretly diverting more than $1.6 billion in personal loans to himself.

The indictment also says Stanford and the other executives misrepresented the Antigua island bank's financial condition, its investment strategy and how it was regulated.

James M. Davis, 60, Stanford Financial Group's chief financial officer, faces similar charges in a criminal information. He is due in court July 1.

A separate indictment in Florida accused another Stanford worker, Bruce Perraud, of destroying records important to the investigation.

The SEC filed a lawsuit in February accusing Stanford and his top executives of committing crimes similar to those in the indictment.