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UPDATE 2-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

(Adds details from court hearing)

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 that he had violated his probation ona bank fraud conviction, and he was sent back to jail until hiscase can be heard on its merits.

The man, who has been known publicly as Nakoula BasseleyNakoula, denied under oath in U.S. District Court in Los Angelesthat he committed eight probation violations, including lying toofficials over the scope his role in the film and using aliases.

If he is found to have violated the terms of his supervisedrelease from prison, the Egyptian-born Coptic Christian manwhose legal name is Mark Basseley Youssef could be sent back toprison for two years.

A crudely made 13-minute video attributed to Youssef, 55,was made in California and circulated online under severaltitles including "Innocence of Muslims." The film portrays theProphet Mohammad as a fool and sexual deviant.

It touched off a torrent of anti-American unrest in Araband Muslim countries. That violence coincided with a separateattack on U.S. diplomatic facilities in Benghazi that killedfour Americans, including the U.S. ambassador to Libya.

As outrage against the film mounted, U.S. authorities saidthey were not investigating the film itself. Youssef was takeninto custody last month over the probation issues and has beenheld without bond at a Los Angeles federal detention center.

Youssef, wearing white jail garb, was escorted into court onWednesday by five U.S. marshals, his hands shackled in front ofhim and a pair of reading glasses perched on his head.

Security was tight for the hearing, which was packed withmembers of the media. Marshals confiscated the cell phones ofreporters before they entered the courtroom.

'DENY'

Prosecutors said Youssef violated the terms of his releaseby using aliases, fraudulently obtaining a California driver'slicense under another name and lying to probation officers byfalsely claiming his only involvement with the anti-Islam filmwas as a script writer.

As U.S. District Judge Cristina Snyder read the eightaccusations against him, Youssef replied to each one with theword: "Deny." An evidentiary hearing was set for Nov. 9.

Legal experts say Youssef's attorneys could argue that theterms of his release in the 2010 bank fraud conviction did notapply directly to his recent activities, in which peopleassociated with the film have said he misrepresented himself.

"It will be interesting to see what the judge does and whatthe reaction is around the world," Loyola Law School professorStan Goldman said. "It's not exactly like an armed robber onprobation, getting caught with an automatic weapon in hispossession. It's a little more technical."

Youssef's lawyer Steve Seiden, who had previously expressedconcerns about his client's safety in jail, also asked the courtto move Youssef out of protective custody and into the jail'sgeneral population. Snyder said she wanted to hear from Bureauof Prisons officials before taking a decision.

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.

(Additional reporting by Alex Dobuzinskis; Editing by CynthiaJohnston, Lisa Shumaker and Cynthia Osterman)

((alex.dobuzinskis@thomsonreuters.com))

Keywords: USA FILM/PROTESTS