UPDATE 3-Allen Stanford jailed until trial

* Judge calls Stanford a serious flight risk

* Stanford's lawyer says will appeal

* Judge's bail denial called unusual -- lawyers (Adds background, quotes from lawyer)

By Eileen O'Grady and Bruce Nichols

HOUSTON, June 30 (Reuters) - A federal judge on Tuesday ordered Texas financier Allen Stanford, accused of a $7 billion fraud, held without bail until trial.

U.S. prosecutors had argued that Stanford, who faces life in prison if convicted on all charges contained in a 21-count indictment, had the means and motive to flee.

"The court determines that Stanford is a serious flight risk and there is no condition or combination of conditions or pretrial release that would reasonably assure his appearance," U.S. District Judge David Hittner said in an order that revokes a $500,000 bond that a magistrate had granted Stanford on Thursday.

Stanford, who spent the last 15 years living in the Caribbean where he was knighted by the Antiguan government, had a network of wealthy associates and had at least two passports, prosecutors told Hittner at hearing on Monday.

"We are very disappointed and we are going to appeal to the 5th Circuit," Dick DeGuerin, Stanford's lawyer said in a statement.

The billionaire, who is more accustomed to jetting around the globe in private aircraft, has been in custody since his arrest on June 18 in Virginia. He is currently being held in a federal detention center 40 miles north of Houston.

Hittner has recent experience with a white-collar criminal jumping bond. Harris "Butch" Ballow, who pleaded guilty after being charged with fraud in 2002, failed to show for sentencing. Hittner held a status conference on Ballow's whereabouts in April, court records show.

The judge's decision to detain Stanford was characterized as unusual, lawyers said.

"In the federal judicial system, it's standard for white- collar crime defendants to be released on bond," said Houston attorney Chris Bebel, a former federal prosecutor who has done white collar criminal defense work and specializes in securities law.

MINDFUL OF MADOFF

Another attorney said he would not be surprised to see the 5th Circuit Court of Appeals in New Orleans overturn Hittner's ruling. Still, Jacob Frenkel, a former federal prosecutor said the appeals court is "fully mindful of the public outrage that attached to Bernard Madoff receiving bail."

Madoff, who was sentenced to 150 years in prison for a $65 billion investment fraud on Monday, was initially granted bail, but was unable to post it. He ended up under house arrest in his penthouse apartment.