Madoff to be in court as U.S. again seeks to jail him

NEW YORK (Reuters) - Accused swindler Bernard Madoff will be back in court on Wednesday as U.S. prosecutors again try to persuade a judge to end his house arrest at his luxury apartment and toss him in jail.

A hearing is scheduled for 2:30 p.m. in Manhattan federal court.

Madoff, a 70-year-old veteran money manager who authorities say has confessed to running a $50 billion scam that defrauded investors worldwide, is out on $10 million bail and living under guard in his $7 million Manhattan penthouse apartment.

The government wants Madoff jailed pending trial or a guilty plea, saying he had sent at least $1 million in valuables, including diamond watches, to family and friends in violation of a court order.

Madoff's actions show he cannot be trusted to abide by court requirements, and he may try to flee to avoid going to prison, prosecutors say.

Lawyers for Madoff have argued that the mailings were innocent mistakes and that their client, who has surrendered his passport, poses no risk of flight.

Ira Sorkin, one of his lawyers, said on Tuesday that Madoff would appear in court for Wednesday's hearing. Madoff, who has been charged with securities fraud and faces the possibility of spending the rest of his life in prison if convicted, is only allowed out of his apartment to go to court.

A judge on Monday rejected the government's request to jail Madoff, but prosecutors have appealed that ruling. The appeal will be heard by a different judge, U.S. District Judge Lawrence McKenna.

Madoff "should not be trusted with a second chance to dissipate assets," Assistant U.S. Attorneys Marc Litt and Lisa Baroni wrote in appeal papers filed late on Tuesday.