By Grant McCool

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

Madoff arrived at the courthouse at about 1:15 p.m., getting out of his car and walking with federal marshals into the building without taking any questions from the throng of reporters awaiting him.

The once-respected money manager, now one of the most vilified figures in the United States, was seen by reporters taking off a sleeveless dark blue flak jacket from under his coat after passing through the security metal detector in the lobby. He then was escorted by marshals to the courthouse elevators.

Madoff, 70, 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 bail conditions, including 24-hour house arrest and electronic monitoring, were imposed to "prevent harm or flight" according to a prior court order.

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, according to prosecutors.

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.

"Mr. Madoff's current highly restrictive bail conditions fully assure his appearance in court and the safety of the community," his defense lawyers, Ira Sorkin and Daniel Horwitz, wrote in court papers on Wednesday.

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 Tuesday.

Madoff's court appearance set off a media frenzy, just as his last visit to the downtown courthouse on January 5, when prosecutors first sought to revoke his bail. At that hearing, Madoff sat quietly beside his lawyers and did not comment to reporters afterward.

Madoff investors are fuming that he remains out on bail and holed up in his luxurious home. But legal experts say white-collar defendants typically are granted bail pending trial as long as they are not flight risks or dangers to the community.

Prosecutors did not initially oppose bail for Madoff after his December 11 arrest, saying in court papers that when the alleged fraud first came to light, he "had confessed" and "had indicated through counsel a willingness to assist the government in doing whatever possible to make victims whole."

But they now believe jailing him is the only way to ensure that Madoff does not try to disperse more assets and cause further harm to his victims, who are trying to recover money they lost. Tighter bail restrictions on Madoff that were imposed on Monday were inadequate, they said.

Among the new restrictions was an order for Madoff to provide the government with a list of portable valuables to be checked every two weeks.

"Checking the contents of his apartment against that inventory every two weeks would only mean that the government would learn after the fact that assets had been dissipated," the prosecutors wrote.

Prosecutors said the inventory check also only applied to Madoff's Manhattan home and not his other properties, which according to court filings include homes in Long Island, New York and Palm Beach, Florida.

(Additional reporting by Martha Graybow; editing by Jeffrey Benkoe)