"The defendant's recent actions amount to obstruction of justice," Assistant U.S. Attorney Marc Litt told a judge at a hearing in federal court in Manhattan.

U.S. District Magistrate Ronald Ellis asked the lawyers to submit written arguments and said he would rule later.

Madoff's lawyer, Ira Sorkin, described the items as heirlooms that included cufflinks and antique watches. He said they were not significant assets. The items were sent to Madoff's children and to unidentified friends vacationing in Florida.

"We maintain it happened innocently," Sorkin said. "He's not a threat to the community and there's no danger he's going to flee."

Madoff later left the courthouse, riding away in a silver sedan while surrounded by a swarm of cameras, and returning to his Upper East Side apartment.

The 70-year-old former Nasdaq stock market chairman was arrested Dec. 11 on securities fraud charges alleging he duped investors out of as much as $50 billion in a giant Ponzi scheme.

The prosecutor told the judge the case against Madoff "is strong and getting stronger."

Madoff, who owns yachts and mansions in New York's Hamptons and Palm Beach, Fla., has been confined to his Manhattan apartment under house arrest.