James Gary Sheets, the former investment czar now facing 34 felony counts, pleaded not guilty Monday afternoon in U.S. District Court.

U.S. Magistrate Ronald N. Boyce warned him sternly, "You're not to harass, threaten, or interfere with any person" who may be a victim of Sheets' alleged investment schemes.When the Deseret News asked Sheets if he wished to comment on his court appearance, he looked down, shook his head, and whispered, "No."

Sheets is charged with mail fraud, interstate transportation of money obtained by fraud, embezzlement from pension plans, and securities fraud.

He is accused of cheating 75 investors in Utah, Nevada, Idaho and Montana of $1.8 million. The 75 invested in several companies associated with Sheets' CFS Financial Corp, including, Working Fund I, Working Fund II and Arrowhead Village General partnership.

His financial empire collapsed soon after forger Mark W. Hofmann murdered Sheets' wife, Kathleen, in 1985. Hofmann pleaded guilty to killing her and Sheets' former business partner, Steven F. Christensen, and is serving a life prison sentence.

Boyce recorded the not-guilty plea and allowed Sheets to remain free on his own recognizance. Boyce said U.S. District Senior Judge Aldon J. Anderson has recused himself from the case. A trial date had not been set by Monday afternoon.

Sheets told Boyce he lives in Leucadia, Calif., and has an office in Carlsbad, Calif. He presently sells insurance.

Boyce ordered Sheets to surrender his passport within 24 hours and to get permission any time he leaves California, except for court appearances in Utah. "The defendant is not to leave the United States for any purpose," he said.

Sheets is also required to report weekly to a federal officer.

Peter Stirba, one of Sheets' Salt Lake attorneys, said his client came to Utah on his own to answer the indictment, issued Oct. 19 by a federal grand jury in Salt Lake City. "There's no reason for him to be detained," he said after the arraignment.

"Obviously it's a complex case, and we will prepare it thoroughly . . . . I think we're eager to get it to trial whenever we can."