If federal prosecutors have their way, a decision to keep disgraced financier Bernie Madoff on house arrest could be overturned.

On Monday, federal prosecutors said they would appeal a ruling by US. Magistrate Judge Ronald Ellis to revoke accused Ponzi scheme mastermind Bernard Madoff’s bail -- a ruling that leaves Madoff on house arrest in his $7 million Manhattan apartment until trial.

"The government intends to appeal the (magistrate) court's order to the district court," Acting U.S. Attorney Lev Dassin wrote in a letter to the judge.

Earlier on Monday, the judge ruled that prosecutors had failed to convince him that Madoff represented either a flight risk or a danger to society.

Click here to read the full ruling

The judge added some conditions to Madoff's bail, however, including that all off the personal items in Madoff's apartment be itemized and the list turned over to prosecutors to prevent him from shedding valuable assets.

Madoff was arrested on Dec. 11 and charged with one count of securities fraud. He is accused of bilking investors, many of them Jewish charities, of possibly $50 billion.

Prosecutors last week sought to have Madoff jailed after the disgraced financier mailed expensive jewelry and other items reportedly worth more than $1 million to family members around Christmastime.

The U.S. Attorney’s office, which is prosecuting the case, accused Madoff of trying to unload expensive items that might one day be used to repay victims who lost money in the alleged scheme.
Noting the high-profile nature of the case and the charged atmosphere surrounding the accusations against Madoff, the judge differentiated between emotion and the law.
“The issue at this stage of the criminal proceedings is not whether Madoff has been charged in perhaps the largest Ponzi scheme ever, nor whether Madoff’s alleged actions should result in his widespread approbation by the public, nor even what is appropriate punishment after conviction,” the judge wrote.

The government simply failed to prove the crux of their case: that no set of bail conditions could ensure both that Madoff would appear in court and also keep the community safe.

“Because the government has failed to meet its legal burden, the motion is denied,” the judge wrote.

Later in the ruling, Ellis wrote, "Aside from the bare assertion that there remains some risk of flight, the government has failed to articulate any flaw in the current conditions of release."

Madoff is electronically monitored and his apartment is being watched by a team of security guards. He and his wife have turned in their passports.

The judge also ruled that the list of personal property in Madoff's Upper East Side Manhattan apartment be checked every two weeks by government investigators.

In addition, the judge ruled that restrictions on transfer of all property will be officially included as a requirement of Madoff’s bail.

The judge also mandated that Madoff’s outgoing mail be searched to confirm that no property is being transferred in the future.

Madoff’s attorneys called the mailing of gifts a mistake and argued that Madoff is not a danger to the community or a flight risk.

Madoff’s attorney, Ira Sorkin told FOX Business Network on Monday, “the decision speaks for itself and we intend to comply with the order.”