BRIDGEPORT, Conn. (AP) — A judge declined to revoke bail Friday for a former Connecticut hedge fund adviser awaiting sentencing for a major fraud scheme.

Prosecutors had said Francisco Illarramendi failed to disclose a tax refund despite an asset freeze. He pleaded guilty last year to fraud and conspiracy to obstruct justice in a scheme to conceal huge losses.

Prosecutors say Illarramendi transferred money among investment accounts without telling clients, falsified documents to deceive investors and used money provided by new investors to pay out returns he promised to earlier investors.

Authorities have said losses could run into the hundreds of millions of dollars. The pension fund for Venezuela's state oil workers accounted for most of the investment in the hedge funds.

Illarramendi has been under house arrest in New Canaan while awaiting sentencing Oct. 30.

Prosecutors requested his bail be revoked, saying he used some of the tax refund of more than $600,000 on a Mercedes Benz and lawyers. The money for the car was used to pay off a lien, according to court papers.

U.S. District Court Judge Stefan R. Underhill called it a violation that could affect his sentence. As for bail, he said he had to consider whether Illarramendi was a flight risk.

"It seems to me the risk of flight here is extremely small," Underhill said. "The bottom line is I don't think this unfortunate, ill-advised and frankly potentially criminal conduct warrants a change in Mr. Illarramendi's bond status."

Still, he warned Illarramendi of the consequences and tightened his curfew.

"If you want to go to prison for a really long time, just hop on a plane and we can accommodate you," the judge said.

Illarramendi's attorney, Alex Hernandez, said his client cooperated extensively with authorities and planned to replace the refund with money from a friend.

Hernandez said Illarramendi, who has a 7-year-old daughter and a 5-year-old son, has been motivated by trying to keep his family stable. He said Illarramendi has been operating in a "fog" and was confused and anxious over the prosecution.