Prosecutors wanted Evan Montvel-Cohen held without bail on theft, forgery, money laundering and other charges, but a circuit judge has allowed the defendant to live on Guam pending trial in the case.

Montvel-Cohen, 42, co-founder of the Air America national radio network, is the victim of "groundless accusations" raised by a former business associate, his defense lawyer, Todd Eddins, said last week.

Montvel-Cohen is accused of stealing more than $62,000 from a Waimanalo landscaping company, Ultimate Innovations, where he worked as a business manager in 2005.

He was arrested on the Hawai'i warrant at Guam International Airport May 27 when he returned there from a trip to the Philippines.

Montvel-Cohen was extradited from Guam to Hawai'i this month.

Eddins said his client had planned to voluntarily return to Hawai'i at his own expense to defend himself.

"The prosecutor squandered thousands of taxpayer dollars to dispatch law enforcement officers to bring him here," Eddins said.

Deputy Prosecutor Christopher Van Marter called Eddins' comments "completely delusional and inaccurate."

Montvel-Cohen refused to waive extradition when he was arrested, requiring prosecutors to obtain what is called a "governor's warrant" for the defendant's transfer here, Van Marter said.

That warrant had to be approved and signed by Gov. Linda Lingle, Supreme Court Chief Justice Ronald Moon, Attorney General Mark Bennett and other officials, Van Marter said.

Once the warrant was in hand, Van Marter said, Montvel-Cohen "was willing to waive extradition" and return to Hawai'i of his own volition.

"We are not generally inclined to believe the word of an accused con artist," Van Marter said.

Van Marter's office asked Circuit Judge Derrick Chan to hold Montvel-Cohen without bail before trial, arguing that he has "a history of fleeing under suspicious circumstances."

Attached to the no-bail motion were copies of New York newspaper accounts of Montvel-Cohen's involvement in the start-up of Air America, including the 2004 investment of more than $800,000 in the radio network venture by a nonprofit boys and girls club where Montvel-Cohen was employed as development director.

That investment, as well as loans that Montvel-Cohen received from the club, were the subject of a criminal investigation by New York City officials, but he was never charged with an offense.

After leaving New York in 2004, Montvel-Cohen began working at Ultimate Innovations here in February 2005 and allegedly used "three schemes" to steal money from the firm from August to November 2005, according to the indictment.

Eddins said Montvel-Cohen has been made "a convenient fall guy" for misdeeds actually committed by the owner of Ultimate innovations, Brian Vidinhar.

Vidinhar did not respond to a request for comment, but Van Marter said "there's no truth whatsoever" to Montvel-Cohen's accusations. Vidinhar and his wife "are persons of integrity who have done nothing wrong," the prosecutor said.

Once in custody here, Montvel-Cohen posted $75,000 bail and Judge Chan last week approved his request to return to his home on Guam before the case goes to trial.

He was required to surrender his passport and is forbidden to travel outside the country or Guam without prior court approval. He also signed paperwork waiving the necessity of any further extradition proceedings.