Texas billionaire Allen Stanford, three associates and a top Caribbean regulator were indicted on fraud, conspiracy and obstruction charges in an elaborate $7 billion pyramid scheme to bilk investors, US Justice Department officials said.

A federal judge in Virginia ordered Stanford, a flamboyant 59-year-old financier, to be transferred to Houston for a hearing on whether he should be granted bail on charges he orchestrated the fraud through his bank on the Caribbean island of Antigua.

He could face life in prison if convicted on all of the charges brought by a grand jury in Texas, Assistant Attorney General Lanny Breuer told reporters in Washington.

Stanford, who surrendered to FBI agents outside his girlfriend's house in Virginia late on Thursday, entered a Richmond federal courtroom in ankle shackles and sat straight with his chin in his hands during a brief hearing before US magistrate Hannah Lauck.

'To go to Texas, yes ma'am,'' he said when Lauck asked if he preferred to have his bail hearing in Houston or Virginia.

Stanford, who has a mustache and salt-and-pepper hair, was dressed in a white shirt and dark pants.

Stanford and executive Laura Pendergest-Holt, accountants Gilberto Lopez and Mark Kuhrt and Antigua's top regulator, Leroy King, were hit with 21 charges alleging they concocted a broad ruse to deceive investors, fabricate financial statements and hide their fraud.

'This scheme was carefully orchestrated to make sure the true information never saw the light of day,' said Robert Khuzami, head of the Securities and Exchange Commission's enforcement unit.

Stanford, who lived lavishly and whose passion for cricket translated into generous backing for the sport in the cricket-loving West Indies, has denied any wrongdoing. His lawyer said on Friday the financier would fight the allegations.

'He is confident that a fair jury will find him not guilty of any criminal wrongdoing,' attorney Dick DeGuerin said in a statement.

His attorneys argued in Lauck's court that Stanford was not a flight risk, but she said, 'I do think there's sufficient evidence here to warrant a detention hearing.'

Authorities vow to root out fraud

Stanford's case is the first major financial crimes prosecution brought under the administration of US President Barack Obama, who has vowed to crack down on economic malfeasance amid a deep global recession.

Breuer said economic troubles made such regulation even more important and vowed the government 'will remain vigilant in rooting out all such fraud.'     Kevin Perkins, assistant director of the FBI, said the agency had opened 100 new probes into phony pyramid investment schemes in recent months.

With many Americans already angered by the financial sector crisis, investigators have been under heavy pressure to crack down on financial and corporate fraud cases after the government failed to respond to warnings over the years that money manager Bernard Madoff was running a massive swindle.

Madoff was arrested last year and admitted in March to orchestrating the biggest financial scam in Wall Street history.

Breuer said Stanford and associates misappropriated most of the $7 billion held in investors' funds and so far less than $2 billion in recoverable assets had been identified.

Stanford already faces civil charges by the Securities and Exchange Commission -- brought in February -- that he fraudulently sold $8 billion in certificates of deposit with improbably high interest rates from his Stanford International Bank Ltd, headquartered in Antigua.

The SEC filed new civil charges on Friday against the company officials and the Antigua regulator, saying they aided Stanford in the Ponzi scheme.

Antigua and Barbuda's attorney general announced later that K