New York, May 16: A New York judge has ordered the head of the International Monetary Fund, Dominique Strauss-Kahn, to be remanded in custody after prosecutors expressed fears that he might flee to France to escape charges of sexually assaulting a hotel maid.
The judge, Melissa Jackson, refused a request for bail, agreeing that Strauss-Kahn, who was pulled off a Paris-bound plane on Saturday and charged with a criminal sexual act, attempted rape and unlawful imprisonment, represented a flight risk.
His defence lawyers said Strauss-Kahn denied the charges against him and one of them, Ben Brafman, said it was "quite likely he will be exonerated".
Earlier they said Strauss-Kahn had agreed to undergo scientific and forensic tests and intends to "vigorously" defend himself.
The prosecution on Monday compared Strauss-Kahn to Roman Polanski, the film director who fled the US in 1978 after pleading guilty to unlawful sexual intercourse with an underage girl.
Prosecutors said they were investigating an additional incident, without specifying what it related to, and that they were waiting for the forensic information from the hotel.
The defence offered $1m (£618,000) bail and said the IMF chief was prepared to reside with his daughter in Manhattan and wear an electronic bracelet. But the judge refused.
Strauss-Kahn appeared tired, impassive and dishevelled at the hearing, having waited for the court to deal with a string of more mundane cases involving three men accused of minor drugs offences.
The charges threaten to create a leadership vacuum at the IMF, overseer of the global economy, and throw wide open next year's French presidential election, ending the hopes of the French Socialist who was favourite to beat Nicolas Sarkozy.
The euro fell to a seven-week low against the dollar on Monday after the charges, raising uncertainty over the status of aid to Greece. Strauss-Kahn was pulled off an Air France flight on Sunday as he headed for Europe for crunch talks with the German chancellor, Angela Merkel, and European finance ministers over the debt crisis.
He was charged with assaulting a 32-year-old maid at the Sofitel hotel in Manhattan. The maid identified Strauss-Kahn at a police lineup at the special victims unit in Harlem, New York, where the 62-year-old was being held.
William Taylor, another of his lawyers, said: "Our client willingly consented to scientific and forensic examinations at the request of the government." Taylor said Strauss-Kahn was "tired, but he's fine".
Strauss-Kahn is alleged to have left his hotel in a hurry after sexually assaulting the maid, forgetting his mobile phone and other items. The woman has not been named. In a statement, Jorge Tito, the managing director of Sofitel New York, said he could not comment on the case.
"However, we want to stress that our employee has been working with Sofitel New York for three years and we have been completely satisfied with the quality of her work and behaviour."
The allegation is a major embarrassment to the IMF, which has authorised billions of dollars in aid to troubled countries and played a major role in the eurozone debt crisis. The arrest will cast a cloud over the IMF's role in addressing the rescues and is likely to have an impact on stock markets as traders react to yet more uncertainty in Europe.
Strauss-Kahn had been due in Europe for talks over how best to tackle Greece's worsening debt crisis and finalise Portugal's €78bn bailout package.
A senior Greek government official said the arrest would not change the IMF's policy in Greece but could cause delays in the short term. The IMF-led bailout has become increasingly unpopular with other IMF members amid growing doubts about the Greek government's ability and resolve to meet the commitments of the international aid package.
"This adds uncertainty to the prospect of early resolution. The more uncertainty exists in terms of major institutions, the higher the cost for a country like Greece," Louka Katseli, the minister of labour and social security, told the Guardian. "What is needed are firm decisions [to ensure] financing for the next years," she said.
The IMF this weekend appointed John Lipsky, first deputy managing director, as interim boss in Strauss-Kahn's place. The board had been due to meet on Sunday in what it described as a "informal" meeting but issued a statement saying the briefing had been postponed "pending further developments in New York".
The case threatens to throw the spotlight on Strauss-Kahn's reputation in France for targeting women, something alluded to but hushed up in the press.
On Sunday night Anne Mansouret, a Socialist councillor, alleged on French state TV that her daughter, the novelist Tristane Banon, had been the victim of an attempted sex attack by Strauss-Kahn in 2002 but had not gone to police. Mansouret claimed Strauss-Kahn had "a kind of addiction, a difficulty in controlling his impulses, which is a problem". She claimed his "preying" on women was a kind of "violence".
Strauss-Kahn's allies said he was a well-known seducer but the allegations of attempted rape seemed far-fetched and unlikely.
Strauss-Kahn does not have diplomatic immunity as head of the IMF. After a night in police custody in Harlem, he was expected to appear before a county judge. Under New York state law, a criminal sexual act and attempted rape both carry potential 15- to 20-year prison sentences. Unlawful imprisonment carries a three- to five-year sentence.