NEW DELHI, India (AP) – An Indian court refused bail Thursday for an American businessman arrested this week on charges of defrauding a local company in an information technology business deal.

Police arrested John Schofield, 63, formerly of Kennebunk, Maine, at a hotel in the southern city of Bangalore on Sunday. They brought him to New Delhi, where a judge ordered him jailed for 14 days while the case is investigated.

An appeal for Schofield’s release on bail would be made to a higher court, said his attorney, J.S. Vedi.

Schofield, owner of TriTech Information Strategies, could be jailed for seven years if convicted of charges of fraud and criminal breach of trust.

Prosecutor Irfan Ahmed told the magistrate on Thursday that Schofield had issued a check for $200,000 in U.S. dollars to M/S Geo Connect Ltd, an Indian company, for providing services to his U.S. clients through a call center on the outskirts of New Delhi for 18 days in December.

The check bounced when presented to a bank in Kennebunk because it was drawn from a closed account, Ahmed said.

The Indian company claimed it had continued to provide call center services to Schofield’s clients in the United States because it took 25 days to learn the check was no good. The prosecutor said Geo Connect’s services during that period were worth 100 million rupees, or $2 million.

The defense attorney told the court that Schofield didn’t pay the Indian company because his U.S. clients withheld payments to him on the grounds that the charges were eight times the actual cost of such services.

J.R. Priani, another of Schofield’s attorneys, told the magistrate that Schofield wanted to settle the dispute with Geo Connect Ltd.

In the United States, Schofield’s wife said TriTech may owe money but that the case should be a civil, not a criminal, matter.

Linda Schofield fears her husband is the victim of a blackmail attempt. She said she has received more than a half-dozen calls from India demanding money to free her husband. His wallet was taken and his bank account has been emptied, leaving her without money, she said.

“I’m afraid they’re never going to let him out of there,” she said from her home in Salt Lake City. “This is just extortion.”

Schofield moved from Kennebunk in January 2000 to set up shop in India, one of the world’s largest English-speaking countries. The couple saw India as a sort of new frontier for call centers, his wife said.

Ms. Schofield, who returned to the United States because of a medical condition, said she fears for the health of her husband, who takes anti-seizure medication. “It’s almost too much to believe,” she said.

Maine Sen. Olympia Snowe is investigating the incident with the state department and Indian government, spokesman Dave Lackey said.

The local consulate has met with Schofield to ensure his health and his access to appropriate legal representation, Lackey said.

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