EUGENE – The owners of Bend-based real estate investment firm PAC Equities pleaded not guilty Tuesday in federal court to allegedly selling $17 million worth of unregistered securities to as many as 240 investors.

During their arraignment, Michael and Phyllis Rich, both of Bend, also told U.S. District Court Judge Thomas Coffin that they are unable to hire their own attorneys and requested court-appointed legal help.

The Riches said federal investigators have restricted the access to their funds, resulting in the request. The couple was represented by court-appointed attorneys Mark Weintraub and Marc Spence at the arraignment.

Coffin granted the request, providing the Riches fill out financial affidavits proving their inability to pay for counsel. He barred the Riches from transferring property and spending more than $1,000 in a single transaction without court approval. Coffin also asked the Riches to turn in their passports.

Assistant U.S. Attorney Sean Hoar said in court that the financial limits were necessary.

”We need to set the threshold (on the Riches’ finances) so that anything beyond living expenses is accounted for,” Hoar said.

He added in court that he was skeptical about the Riches’ claim that they can’t afford legal defense.

”(The federal investigators) served seizure warrants on more than 50 accounts,” Hoar said. ”They seized a few hundred thousand dollars in some of the accounts we didn’t know about. The assets we don’t know about are what we are worried about.”

The Riches and their lawyers declined to comment after the hearing.

PAC sold property-based investments, acting as a lender for certain commercial real estate projects. The firm promised investors annual returns of 10 percent or more, with the interest often paid out monthly.

Investors say they stopped receiving payments this summer.

The firm was associated with properties in Oregon, Arizona and Washington state.

The U.S. Attorney’s Office announced a grand jury indictment of PAC Equities on Dec. 15. The firm allegedly misinformed investors while pursuing investments and used the money invested by later customers to pay prior interest commitments to earlier clients.

If convicted, the Riches could face up to 20 years in prison or $5 million in fines.

A few investors attended the hearing. One of them said he only cares about one thing.

”Our whole pursuit is to recover all our investment, with interest if possible,” said Don Goeckner, 73, of Roseburg. ”That’s all we’ve asked for.”

Trial for the Riches has been set for May 31.