COLUMBIA -- Longtime Greenville businessman John M. "Jack" Sterling Jr. pleaded not guilty Monday to securities fraud and conspiracy charges stemming from the collapse of Carolina Investors Inc.

Sterling, 68, released on $100,000 bond, must surrender his passport and restrict travel to North Carolina and Georgia, where he and his wife have personal and business interests.

If convicted, Sterling faces a maximum of 25 years in prison and fines of more than $105,000.

His attorneys urged Circuit Judge James W. Johnson Jr. at a hearing here to free the former chairman and chief executive officer of HomeGold Financial on a personal recognizance bond.

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But Johnson said in the interest of consistency with other defendants in the case he would set bond at $100,000.

A trial date for Sterling has not been set. Assistant Attorney General August G. "Tav" Swarat II said in court that Sterling has no criminal record.

"Jack Sterling looks forward to his day in court," his attorney, E. Bart Daniel of Charleston, told Johnson, "and we intend to address each and every allegation one by one."

Daniel, a former South Carolina U.S. attorney, prosecuted state legislators in Operation Lost Trust in the 1990s.

Sterling declined comment to The Greenville News before the bond hearing and left with his attorneys afterward.

Sterling was indicted last week by the state grand jury on three criminal counts of "knowingly and willfully" participating in a large-scale fraud and conspiracy that led to the collapse of Carolina Investors, a HomeGold subsidiary, according to Attorney General Henry McMaster.

According to the indictment, Sterling exercised control over the business operations of both companies until March 20, 2003, the day before Pickens-based Carolina Investors closed its doors to the public, costing 12,000 people an estimated $278 million.

He also was a member of the Carolina Investors board before resigning in December of 2002.

Sterling's indictment alleges that despite several troubling developments, Carolina Investors continued to sell securities to the public and to forward the proceeds to finance HomeGold's money-losing operations. HomeGold continued to spend "lavishly" and to sustain substantial losses, the indictment charges.

The troubling developments included an auditor's warning that Carolina Investors might fail, unsuccessful efforts to sell HomeGold's retail mortgage operations, HomeGold's retention of bankruptcy counsel, and the resignation of the parent company's chief financial officer and other executives, according to the indictment.

The CFO, Kevin Martin, resigned partly due to "his firm belief" that the sale of securities through Carolina Investors should stop immediately because repayment of the investors' debt was no longer possible, the indictment charges.

A copy of Martin's resignation letter was provided to all of HomeGold's officers and directors, including Sterling, on Aug. 29, 2002, the indictment said.

Between 1998 and March of 2003, Sterling participated in the formation of misleading documents, pamphlets, prospectus and statements that were provided to current and potential customers of Carolina Investors by company officers, directors and employees, the indictment charges.

In many instances, people who provided misleading information received raises and bonuses, even after the discovery of the improper conduct in connection with the securities offerings, according to the indictment.

It also alleges that once they learned that auditors for HomeGold and Carolina Investors had substantial doubts Carolina Investors could stay in business, Sterling and others, who were not named, obtained corporate liability and employment practices liability insurance coverage from Clarendon National Insurance Co.

HomeGold officials submitted misleading and fraudulent information to obtain the insurance coverage on March 25, 2002, the indictment alleges.

As the financial condition of HomeGold and Carolina Investors continued to worsen, Clarendon notified HomeGold on Nov. 11, 2002, that the insurance coverage would not be renewed, the indictment charges.

Carolina Investors closed its doors March 21, 2003, one week before Clarendon's insurance coverage expired, according to the indictment.

Sterling became the sixth person charged with wrongdoing as part of McMaster's three-year investigation into one of the biggest bankruptcies in South Carolina history.

Four people have been convicted and have been sentenced to jail or prison terms, or are awaiting sentencing.

Daniel in court Monday described Sterling as a "self-made man" and someone who "has spent a lifetime of giving and service in the greater Greenville community" through his business and civic work.

A graduate of The Citadel and an Army veteran, Sterling earned a master of business administration degree from the University of Virginia and worked for Hartsville-based Sonoco Products before starting his own venture capital company.

He also has served on several community boards for groups in Greenville.