UPDATE 2-Madoff lawyer asks appeals court for jail release

* Madoff lawyer argues for reinstatement of bail

* No immediate ruling by appeals court panel (Adds details, quotes, bylines)

By Martha Graybow and Grant McCool

NEW YORK, March 19 (Reuters) - Bernard Madoff's lawyer argued to a federal appeals court on Thursday that the confessed swindler posed no serious risk of flight and should be released from jail ahead of his June sentencing.

A panel of three judges hearing Madoff's bail appeal did not rule immediately on the request to reinstate his house arrest, which U.S. prosecutors opposed.

Prosecutor Marc Litt argued that the disgraced money manager has nothing to lose by trying to flee before a potential life sentence in prison and cannot be trusted.

Madoff, jailed at a Manhattan detention center, was not permitted to attend the proceeding. The 70-year-old former Nasdaq chairman pleaded guilty last week to 11 criminal counts of running Wall Street's biggest-ever investment fraud, involving as much as $65 billion over 20 years.

The judges asked pointed questions of both sides during the 20-minute oral arguments. Afterward, they took a brief break, raising speculation they would immediately rule. When they returned to the bench, however, the judges said a decision would be released "in due course."

Such rulings can take days or weeks, although this high-profile case was expedited.

Madoff's sentencing is set for June 16.

Judge Richard Wesley of the U.S. Court of Appeals for the 2nd Circuit asked defense attorney Ira Lee Sorkin why he should consider releasing a man who "has the mechanisms of flight at his fingertips" and who had placed virtually all of his assets in his wife's name.

Chief Judge Dennis Jacobs questioned why the government considered Madoff a serious flight risk now, given that he could have left the country before his swindle came to light in mid-December and avoided arrest.

"Is it relevant that early in December, Mr. Madoff could have fled, he could have taken $100 million and settled in some tropical republic?" he asked Litt.

"He didn't do that, so why isn't it a powerful argument against your position?"

Litt argued that in other white-collar cases, defendants were jailed ahead of their sentencing.

Madoff was immediately jailed by U.S. District Judge Denny Chin last Thursday after confessing to his crimes. Chin said Madoff had both the means and motive to flee.