U.S. authorities on Thursday arrested the head of a Las Vegas investment company for running a $1.5 billion Ponzi scheme which targeted thousands of Japanese investors for four years until its exposure in 2013.

68-year-old Edwin Fujinaga, president of MRI International Inc., pleaded not guilty to eight counts of mail fraud and nine count of wire fraud during his first appearance at a federal court. He is also charged with three counts of money laundering.

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The U.S. District Court ordered his release on his own recognizance while his trial has been scheduled for Sept. 14. Federal prosecutors did not raise objections to with his release from custody since he has surrendered his passport and is effectively under travel restrictions.

Fujinaga, who according to the Review Journal, was a big donor to Las Vegas Mayor Carolyn Goodman's 2011 election campaign, was charged, along with two former Japan-based executives, for the Ponzi scheme, which thousands of Japanese investors fell victim to.

On Wednesday, a federal grand jury indicted 66-year-old Junzo Suzuki, vice president of the company's Asia Pacific outfit. His 36-year-old son, Paul Suzuki, who served as general manager for the company's outfit in Japan, was also indicted on the same charges.

Reports indicate that the Suzuki and his son are in Japan but are not in police custody at the moment.  A Wednesday Japan Times report reveals that U.S. authorities are seeking their arrests in the international fraud case.

According to the indictment filed in the Las Vegas court, prosecutors want the three suspects to forfeit all funds garnered from their fraudulent dealings. Legal experts say if the three defendants are found guilty of the charges leveled against them, they could face decades behind bars.

Assistant U.S. Attorney General Leslie Caldwell said Fujinaga, Suzuki and Paul Suzuki fraudulently solicited investments, which they said would be kept and managed by an independent escrow agent based in Nevada.

But despite their promises and contracts, the defendants allegedly used their investors' money to maintain a lavish lifestyle and settle accumulated gambling debts. They allegedly also paid themselves huge commissions.

A 2013 civil complaint filed by the U.S. Securities and Exchange Commission (SEC) accuses Fujinaga of using monies acquired from the scheme to purchase luxury cars and pay off his credit card debts. He also reportedly paid a total of $25,000 in alimony and child support from the fraudulent scheme.

A Nevada federal judge in February granted an SEC request for a $585 million civil judgment filed against MRI International and Fujinaga.

According to the indictment documents, MRI employed a technical approach named "factoring" in its scheming. The practice involves purchasing accounts receivable from medical providers at a discount. Then selling it a high rate in a attempt to recover more than the discounted price from the debtor.

Since 2011, MRI has been in default on payments it owes thousands of investors.

The media has widely carried reports of Fujinaga's $50,000 campaign donation to mayor Goodman's 2011 campaign. A spokeswoman for the mayor released a statement on Thursday saying that Fujinaga remains innocent until proven guilty and noting that the mayor has no immediate plans of refunding his campaign donation.

"There is the presumption of innocence until proven guilty in this country," Goodman's statement read. "And I am neither a lawyer nor one who is familiar with the case."

TagsPonzi Scheme, Edwin Fujinaga, MRI International Inc., U.S., Carolyn Goodman, Junzo Suzuki, Paul Suzuki, U.S. Securities and Exchange Commission