UPDATE 1-California man linked to anti-Islam film denies violating probation

* Charged with probation violations on bank fraud conviction

* Linked to Internet video that sparked violent protests

* Production of the film itself doesn't violate U.S. law

(Recasts with court appearance)

By Dan Whitcomb

LOS ANGELES, Oct 10 (Reuters) - A California man linked toan anti-Islam film that stoked violent protests in the Muslimworld denied on Wednesday he had violated his probation on afraud conviction, and was sent back to jail until his case canbe heard on its merits.

The Egyptian-born man, who has been known publicly as NakoulaBasseley Nakoula, denied in court committing eight probationviolations, including lying to officials over the scope his rolein the film and using aliases.

A crudely made 13-minute video attributed to the man, whoappeared in court on Wednesday under the name Mark BasseleyYoussef, was filmed in California and circulated online underseveral titles including "Innocence of Muslims."

It portrays the Prophet Mohammad as a fool and a sexualdeviant, and sparked a torrent of anti-American unrest in Araband Muslim countries last month. The violence coincided with aseparate attack on U.S. diplomatic facilities in Benghazi thatkilled four Americans, including the U.S. ambassador to Libya.

As outrage against the film mounted, U.S. authorities saidthey were not investigating the film itself.

But prosecutors have said they could seek to have Youssef,55, sent back to prison for up to two years if he is found tohave violated his probation on a bank fraud conviction.

Youssef, who was escorted to court by five U.S. Marshals,was ordered held without bail last month and has been staying ata high-rise federal jail in downtown Los Angeles.

Under the terms of his release from prison last year,Youssef was barred from using aliases without the permission ofa probation officer and restricted from accessing the Internet.An evidentiary hearing in his probation case was set for Nov. 9.

"It will be interesting to see what the judge does and whatthe reaction is around the world," said Stan Goldman, a LoyolaLaw School professor.

Goldman said attorneys for Youssef could argue the terms ofhis 2011 release from prison in the bank fraud case did notapply directly to his recent activities, in which peopleassociated with the film have said he misrepresented himself.

"It's not exactly like an armed robber on probation, gettingcaught with an automatic weapon in his possession. It's a littlemore technical," Goldman said.

The defendant, who had worked in the gas station industryand most recently lived in a suburb of Los Angeles, declared atthe outset of his last hearing that he had changed his name toMark Basseley Youssef in 2002.

The probation issues were the latest of Youssef's legalwoes. An actress who says she was duped into appearing in theanti-Islam film has sued him over the matter, identifying him asthe film's producer. Cindy Lee Garcia also named YouTube and itsparent company Google Inc as defendants in the case.

Google has refused to remove the film from YouTube, despitepressure from the White House and others to take it down, thoughthe company has blocked the trailer in Egypt, Libya and otherMuslim countries.

(Editing by Cynthia Johnston and Lisa Shumaker)