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RIVERSIDE ---- The oldest of four men accused in the largest fraud case in Riverside County history will remain held in lieu of $144 million bail, a Superior Court judge ruled Tuesday.

John William Heath, 78, of Covina, sat in an orange jail jumpsuit confined to a wheelchair during a hearing held before Judge Gordon R. Burkhart at the Hall of Justice.

Burkhart, who ruled that the bail amount would remain as previously set, said he believes Heath "still remains a danger to others."

Heath's attorney, Jeff Van Wagenen, told the judge that his client's health is deteriorating while in a jail cell, leading to the need for him to be in a wheelchair. "When he's up and walking around, his health is better," Van Wagenen said.

Heath's attorney did not present the court with any specifics about the man's medical condition.

Deputy District Attorney Michael Silverman told Burkhart that when Heath was arrested several months ago, "he said he was in perfect health."

Heath, his son Daniel William Heath, 47, of Chino Hills; Denis Timothy O'Brien, 50, of Yorba Linda; and Larre Jaye Schlarmann, 46, of Carlsbad, are accused of bilking investors ---- most of them elderly and many from Southwest County ---- of an estimated $178 million, prosecutors say.

Authorities say there are more than 800 victims across the country.

The four men are each being held in lieu of $144 million bail. The amount was set by the court based on the initial amount prosecutors listed as the approximate monetary loss when the four men were arrested in July.

The four operated D.W. Heath & Associates Inc.; Private Capital Management Inc.; Private Collateral Management Inc.; and the PCM Fixed Income Fund I LLC, authorities said. They had offices in Hemet, Brea, Pasadena and Big Bear, and a small office in Temecula, according to authorities.

More than 75 people packed the courtroom, leading to others having to wait outside.

Ray Buege, 74, and his wife, Midge, 66, traveled to the hearing from Covina. Ray Buege said he was pleased with the judge's ruling, saying he has a "gut feeling" that John Heath would flee if afforded the chance.

The couple invested and lost $600,000, Buege said, adding that his wife has been very emotional about the loss. It was John Heath who they first dealt with regarding the investments, Ray Buege said. They later worked with his son, he added.

"I figure there isn't much we can do about it now," he said. "We just made a big mistake in trusting them."

The four men have been charged with a number of felonies, including selling unqualified securities, elder abuse, violating a court order to desist selling securities, selling securities by misrepresentation, grand theft, burglary and money laundering, authorities said.

Investors nationwide were induced to place their money in Private Capital Management notes that purportedly paid a "guaranteed" return of 5.5 percent to 8 percent per year, according to the district attorney's office. The defendants claimed that investor funds would be used to make secured loans to businesses, officials said.

Deputy District Attorney Mark Mandio, who is prosecuting the case with Silverman, told the judge at Tuesday's hearing that John Heath has "a lot of incentive" to flee ---- should bail be reduced substantially.

"He's facing a lot of time," Mandio said. Prosecutors have previously said that each defendant could face prison sentences of up to 200 years if the case goes to trial and they are convicted.

"If (John Heath is released from jail), there's a good chance we'll never see him again," Mandio told Burkhart. "He is a true flight risk."

Mandio said that at least $35 million of the investors' money still is unaccounted for.

Van Wagenen, John Heath's attorney, said after the hearing that he was hoping to have his client released on his own recognizance or to have bail reduced to somewhere around $1 million.

Van Wagenen told the judge that his client is not a flight risk.

"The district attorney's office has seized all of his funds and frozen his assets," Van Wagenen said after the hearing, adding that it would be unlikely Heath could have posted bail even if it had been substantially reduced.

The $144 million bail each of the men is being held on is the largest bail amount ever set for individuals in the county, authorities said.

"I think that $144 million bail is strictly for shock value," Van Wagenen said.

The next action in the case will be a hearing tentatively scheduled for Monday at which four of the elderly victims will testify about what they say happened to them.

There is a number alleged victims in the fraud case can call on Friday to find out whether the hearing will be held Monday, officials said. The Riverside County office of C.A.R.E., or Curtailing Abuse Related to the Elderly, is expected to have that information on a recorded line at (800) 476-7506.

Contact staff writer John Hall at (951) 676-4315, Ext. 2628, or jhall@californian.com.