PORTLAND – A Boothbay supermarket clerk-turned-commodities trader appeared in court Thursday to deny government charges that he was behind a $6 million fraud scheme.

Edward W. Knipping, 55, was released on $200,000 bail and will be monitored electronically.

Knipping is accused of lying to 1,200 people in 40 states, Canada and Australia about investments he supposedly was making in the commodities futures market.

Prosecutors allege Knipping lied when he told people he was successfully investing their money, and that he abandoned his home in Maine and abruptly moved to Texas to escape arrest after he found out the FBI was investigating him.

Assistant U.S. Attorney Donald Clark said Thursday that Knipping should be detained because he poses a financial danger to the community and may run away again.

But Knipping’s lawyer, Walter McKee, described his client as an amateur who may have gotten in over his head.

McKee said Knipping lost money and may have exaggerated his success to attract business. But “puffing” his results, McKee said, is not criminal activity.

“It’s like when the car dealer tells you that this is the greatest car in the world even though it’s a lemon,” he said. “If this is fraud, there are a lot of people out there who are just as guilty as he is.”

Knipping, who had no formal education or experience in the financial world, founded Time Traders Inc. in 1999 and began soliciting investments. The government said his last job was as a supermarket stockroom clerk.

Prosecutors said he collected about $6 million, of which he lost about $1.3 million in investments, kept about $1 million in Maine bank accounts and paid about $1.3 million. The rest is unaccounted for.

When new investor money came in, Knipping paid some of it to older investors, prosecutors said, telling them it was their share of profits from his trades. They also said he gave some as commissions to recruiters who got others to invest.

But McKee said he is not sure what happened to the $6 million the FBI alleges Knipping collected, if in fact it was that much.

Prosecutors said this is the second biggest case of investment fraud in Maine history. In 1999, Catherine Duffy Petit was sentenced to more than 15 years in prison for masterminding an investment scam in which 140 Mainers lost nearly $8 million.

Knipping will be allowed to leave Maine for three days to attend his daughter’s wedding next month, but Judge David Cohen refused to allow him to serve the rest of his house arrest in Texas instead of Maine.

“These are serious charges,” Cohen said.