Bail for Yehuda Abraham was set Friday at $10 million. Half of that must be secured with cash and property.
Abraham, 76, a New York diamond dealer, will remain in federal custody until court officials have interviewed at least 10 friends and relatives who say they are willing to post his bond. If he is released, Abraham must remain under house arrest with electronic monitoring.
A defense lawyer estimated it would take several days to meet bail conditions. Larry Krantz said his client hopes to be vindicated.
Federal prosecutors wanted Abraham held without bail. Assistant U.S. Attorney Jeffrey Clark said the defendant was a wealthy man with family and friends around the world.
Abraham's lawyer had contended his client posed no flight risk or potential for harm to the community. Krantz said his client has lived and run a business in New York for 50 years and suffers from health ailments.
Three men are accused in a plot to smuggle shoulder-fired missiles that could shoot down a commercial airliner. They were arrested in New York and New Jersey on Tuesday after an international sting operation.
Abraham and an Indian citizen, Moinuddeen Ahmed Hameed, 38, are charged with conspiring to operate an unlicensed money transmitting business. A 68-year-old Briton, Hemant Lakhani, is charged with trying to provide material support to terrorists and dealing arms without a license.
All three defendants remain in custody and none has entered a plea. Hameed's lawyer, Cathy Fleming, said her client maintained his innocence, while Lakhani's lawyer, Donald J. McCauley, has declined to comment.
The arrests resulted from an investigation that began in December 2001, when the first of what eventually amounted to 150 conversations occurred between Lakhani and an FBI informant, in which Lakhani expressed an interest in brokering an arms sale, according to complaints and affidavits in the case.
During the same time period, Lakhani developed what he thought were contacts with Russian suppliers of shoulder-launched missiles, who were actually Russian agents working in cooperation with the FBI. Last month the Russians gave Lakhani a fake missile that he thought was the real thing, and he soon asked them for 50 more of the weapons, according to court documents.