The Libyan government had invested $500 million of its cash reserves with accused swindler Allen Stanford's firm as of late 2008, a court filing showed on Tuesday.

And Stanford and Andrea Stoelker, his girlfriend, flew to Tripoli on Jan 25, 2009 because Libya was considering increasing the amount it had invested with him, according to a court document.

Stanford met with several officials, including Mohamed Layas, chief executive officer of the Libyan Investment Authority, the filing said.

A representative from the Libyan embassy in Washington was not immediately available to comment. It was not clear whether the investment was recouped before the US government shuttered Stanford's network of financial firms.

US prosecutors cited the 2009 trip to Libya at a day-long detention hearing before a federal judge in Houston on June 29 as evidence that Stanford was a flight risk, but Stanford's attorney said it was a regular business trip.

The Texas financier, who faces criminal and civil charges related to a $7 billion fraud, was ordered by US District Judge David Hittner to remain in custody until his trial last week.

Dick DeGuerin, Stanford's lawyer, is fighting that order and asked the judge to reconsider it in the court filing on Tuesday.

Federal prosecutors had argued that Stanford would not stick around for his trial, citing, among other factors, the billionaire's residence outside the United States, frequent trips on his private jet, a missing but expired passport and a global network of wealthy contacts.

The passport turned up, however, after the detention hearing. It had been seized along with Stanford's other possessions by a court-appointed receiver, prosecutors said in a court filing last week.

'The government's lack of candor regarding the expired passport is egregious,' DeGuerin said in the court filing. 'The government repeatedly claimed no knowledge of the whereabouts of Mr Stanford's expired Antiguan diplomatic passport, despite the fact that the passport had been in the possession of the receiver for months.'    

That alone is grounds for reversal of the detention order, the filing said.

DeGuerin has said that he plans to appeal Hittner's decision to the 5th Circuit Court of Appeals in New Orleans.

The government has accused Stanford and others of running a 'massive' Ponzi scheme with client funds from certificates of deposit issued by the firm's offshore bank in Antigua.

To cover their tracks, prosecutors have said Stanford falsified accounting documents and bribed the regulator with oversight of Stanford International Bank in Antigua, according to the 21-count indictment. Stanford has pleaded not guilty to the charges. - Reuters