Mr. James is accused of charging more than $58,000 in personal expenses on city-issued credit cards during his two decades as mayor and of selling city land at below market rates to Ms. Riley, who the authorities said then resold the property at an enormous profit.

Judith Germano, an assistant United States attorney, told Judge Martini that Mr. Ashley represented someone referred to in the criminal complaint as “Individual 1.” The person, who is not named in the indictment but who is “close to both defendants James and Riley,” lent $10,000 to Ms. Riley to help her pay for several properties in Newark and later received checks from Ms. Riley, according to prosecutors.

Ms. Germano said the other person Mr. Ashley represented was “an attorney in a number of real estate transactions” that are part of the case. In response, Mr. Ashley said, “I don’t see that there’s a conflict.” The judge told Ms. Germano to submit a brief with her concerns.

During the hourlong court appearance, Mr. James, 71, wearing a dark blue suit, smiled and seemed relaxed, limiting himself before and after the hearing to a single, repeated comment to reporters: “God is good all the time.” He and Ms. Riley, 38, who also pleaded not guilty, waived their right to a speedy trial.

Ms. Riley, whose relatives sat in the small, packed gallery, looked more anxious than Mr. James. She wore a black suit, flipped through legal papers, and did not smile.

Prosecutors said the evidence against Mr. James and Ms. Riley was largely contained in 40 banker’s boxes, each holding roughly 200 documents. Perry Primavera, a special assistant United States attorney, said that the prosecution would call about 60 witnesses, and that the trial would last about 12 weeks. The trial is tentatively set to begin in early February.

Mr. Ashley, a well-known criminal defense lawyer here, once represented Mr. James’s chief of staff, Jackie R. Mattison, who was found guilty in 1997 of taking bribes. After Monday’s court hearing, Mr. Ashley said of the prosecutors: “I didn’t know they were going to try to have me removed. I anticipated it could be an issue. They were never too happy with my representation.”

In court, Ms. Germano said that Mr. Ashley himself could be called as a witness in the case, to give evidence about a personal trip Mr. James and his companions made to Martha’s Vineyard in 2003, which prosecutors said cost the city of Newark more than $3,500.