NEW YORK (AFP) - Should a Turkish gold mogul, arrested en route to Disney World with his superstar singer wife and five-year-old daughter, be released on a US$50 million (S$68.9 million) bond with armed security guards in a lavish Manhattan apartment?

That is the question a US federal judge is pondering with respect to 33-year-old Iranian-Turkish businessman Reza Zarrab, charged with conspiring to violate international sanctions on Iran.

Arrested in Miami in March, Zarrab on Thursday stepped into the glare of a New York court to attend a more than two-hour hearing that could determine whether he can swap jail for a fancy New York apartment in the sky.

US prosecutors say that from 2010 to 2015, he conspired to thwart sanctions against Iran by concealing hundreds of millions of dollars in global transactions conducted on behalf of Iran and Iranian outfits.

The US government says the evidence is "overwhelming" and opposes bail, saying that Zarrab poses an "extraordinary flight risk" as a "lavishly wealthy" man with untold financial assets and contacts across the world.

Zarrab faces multiple conspiracy charges, of which the most serious - conspiracy to commit bank fraud - could see him jailed for 30 years if convicted.

He cut a forlorn figure in court, dressed in navy jail scrubs worn over an olive T-shirt and sporting a dark beard as he huddled with a Turkish interpreter and occasionally cast his eyes backwards to the public gallery.

His lawyer, the same prominent criminal defence attorney who represented disgraced International Monetary Fund (IMF) chief Dominique Strauss-Kahn for sexual assault, offered a US$50 million bail package, secured by US$10 million in cash.

Defence lawyer Ben Brafman said that a Manhattan apartment on the 15th floor had already been rented, furnished, equipped with sensors on the windows and kitted out with surveillance cameras in readiness for his house arrest.

The home was palatial enough to include a meeting room in which his lawyers could work and prepare for trial, Mr Brafman said.

Zarrab would be subject to electronic monitoring and guarded around the clock by two armed guards, and could sign a waiver permitting them to shoot him should he try to escape, he added.

He would be permitted to leave the apartment only in the company of armed guards and a driver to attend court, medical appointments, meet his lawyers and for religious services in the New York area, Brafman added.

He declined to put a specific figure on his client's wealth, but described him as "a man of substance" and the 56th top taxpayer in Turkey.

US Federal Judge Richard Berman said he expected to reach a decision "over the next week or so."

New York judges have released other wealthy defendants to home arrest in similar circumstances, including suspects in the FIFA corruption scandal who posted multi-million-dollar bond packages and submitted to electronic tagging.

The government told court there was an "inherent conflict of interest" in jailors being paid by an inmate - an arrangement which allowed the rich to create conditions of confinement more palatable than jail.

The prosecution said that using armed guards to monitor him in Manhattan posed "a health and safety risk" to bystanders and neighbors' property.

Mr Brafman said his client was charged with "an unprecedented violation" of Iranian sanctions as a foreigner who had not exported any goods out of the United States nor imported into it, had no American bank account and had acted overseas.

Sanctions, he argued, were never intended to apply to a non-US citizen. "We would be controlling the entire world. We could be prosecuting people," he said in any country in the world. "And that is not what we're supposed to do."

It could take months, if not a year, to go to trial, he warned and argued that Zarrab has no interest in skipping bail.

But his assets are in dispute. Zarrab told officials in Florida that he earns US$60,000 a month, and owns an US$8 million home and a US$1 million office building in Turkey.

US prosecutors say all they have confirmed is that he owns three dozen vehicles, horses, yachts, a private jet, real estate, an armoury of firearms and keeps private bodyguards.