He has denied any wrongdoing and said on Twitter last month that his successor, Juan Carlos Varela, was going after him to divert attention from his own problems.
Martinelli appeared in court on Tuesday, shackled and wearing a khaki jail jumpsuit. His lawyer said the former leader should be released on bail and argued the charges against him did not warrant extradition to the country he left in January 2015.
“This is a politically motivated proceeding, instigated by his political opponent, the current president of Panama,” lawyer Marcos Jimenez said, noting his client recently announced plans to run for the office again.
The former Panamanian leader presided over an infrastructure boom and Latin America's fastest economic growth in recent years, but his administration was tainted by allegations of corruption.
U.S. Magistrate Judge Edwin Torres set a bond hearing for June 20 but warned that getting bond in extradition cases was difficult. Prosecutors argued Martinelli should remain in detention until he is extradited.
Panama's Supreme Court issued a warrant for Martinelli's arrest in December 2015 after he failed to appear at a Panamanian court hearing on his case. Last September, Panama sent the U.S. Department of State a request for his extradition.
Varela, who served as Martinelli's vice president, has not commented on the former president's arrest. The two men have sparred bitterly since the transfer of power.
Jimenez said Martinelli had filed an asylum petition in the United States and had a hearing in March.
“He’s not in hiding,” the defense lawyer said. “He has assets here. He has family here. He has a home here, and the government knows where he is.”
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