Marc Dreier was charged earlier this week by the Securities and Exchange Commission in connection with what it called a "stunning" deception that involved the sale of falsified promissory notes to a number of investment funds.
The SEC's complaint says Mr Dreier used faked financial statements and audit opinion letters, as well as a cast of associates masquerading as legitimate investment advisers, to pull off the fraud.
Speaking in court, prosecutor Jonathan Streeter told US magistrate judge Douglas Eaton that the losses from the scheme are now thought to have more than tripled since the charges were announced on Monday (December 8th).
He added: "Mr. Dreier is in a desperate situation and the only way for him out of the desperate situation is for him to flee."
Judge Eaton denied bail on the potential for flight risk.
Mr Dreier also faces charges in Toronto, Canada in connection with the alleged attempted sale of fake notes to a hedge fund.