Things are beginning to look bleak for Howell and Vernice Woltz who were arrested last week for running a tax-fraud scheme out of the Caribbean including The Bahamas.

According to AP, Federal prosecutors asked and got Judge W. Earl Britt, to deny bail to the couple and that they should held without bond until trial.

The prosecutors gave as their rational the fact that the Woltzes have significant undeclared assets and have moved their primary home to The Bahamas. The Guardian has learned that they purchased a million-dollar home on the beach at Goodmans Bay. Renovations on the palatial home stopped some months ago. One observer said if the work was stopped by the contract for lack of payment then the contractor "if he is smart" could get the property.

The couple was also held because they were described as "key figures" in a separate international money-laundering case. The federal indictment by which they were charged, was unsealed in Charlotte, North Carolina last week when they were named along with Wilmington tax attorney Ricky Graves and Raleigh attorney Sam Currin were also charged in the case. Mr Currin, a former Superior Court judge, "until 1990", was once an aid to Jesse Helms and served as chairman of the Republican Party in North Carolina between 1996 and 1999. Up until the purchase of the palatial house on the beach, the Woltz had offices in the British American Building in downtown Nassau in the space formerly occupied by Gulf Union Bank.

The Guardian has learned that the plan was to move their Bahamas operations into the beach estate and had moved out of the posh offices downtown.

The Securities Commission of The Bahamas have confirmed that although Sterling Trust Bahamas was the company named in the indictment and that there was a Sterling Management registered with the Commission "there were no companies registered by the Commission in which either of the Woltzes was involved.

According to US Attorney Gretchen Shappert in Charlotte, they were all involved with "abusing financial trusts created under Caribbean companies to avoid US taxes". If convicted on all charges Howell faces a maximum of 65 years in prison, Currin up to 60 years, Vernice Woltz 55 years, and Graves eight years, prosecutors said.

Currin, Graves, and Howell Woltz were charged with tax fraud conspiracy for devising foreign financial arrangements, including preparing "false and fraudulent documents to deceive the IRS," the and acted "so that wealthy United States citizens could evade federal income taxation."