An Orono man who had been scheduled to accompany Gov. Tim Pawlenty on a state trade mission to India next month was charged Thursday in federal court with two counts of wire fraud in an alleged $2.5 million investment scheme.

Gregory Marion Hewitt, 57, had been expected to plead guilty to the charges, but his lawyer, Dan Scott, said he was unable to come to a "final agreement" with prosecutors. He waived indictment but pleaded not guilty to the charges.

Assistant U.S. Attorney John Marti asked that Hewitt surrender his passport. U.S. District Judge Paul A. Magnuson ordered him to do so.

Until a few days ago, the Minnesota Trade Office expected Hewitt to be among 40 to 50 state and business leaders on the trade mission, which departs Oct. 20 for a weeklong trip to India.

Hewitt was listed as founder of a company called Continuum Transformative and an "independent delegate" with the trade mission.

Tony Lorusso, executive director of the trade office, said Hewitt had applied to go on the trip. He declined to comment when asked how Hewitt was selected for the trip. Hewitt "voluntarily withdrew" a few days ago, he said.

Brian McClung, a spokesman for the governor's office, said Hewitt was not part of the state's "official" delegation. Individuals with a legitimate business interest can apply to come along, and if they pay their own way, they may be allowed to do so, he said. Hewitt was one of those.

But some "anonymous individuals" alerted the governor's office about Hewitt's alleged misdeeds, McClung said.

"When we became aware that Hewitt had 'issues' ... and looked into those complaints, we contacted Hewitt and asked him to withdraw from the trade mission, and he voluntarily agreed to do so at our request."

Two investors and a federal agent who worked on the case attended Hewitt's arraignment Thursday expecting him to plead guilty. They declined to comment afterward.

The charges say that Hewitt devised a fraudulent investment scheme to obtain more than $2.5 million between 1998 and 2005. Specifically, he is alleged to have arranged two wire transfers totaling $94,583.51 between financial institutions in Minnesota and Onaga, Kan.

Scott said if a plea bargain cannot be reached, he expected the government to "expand out the nature of the charges." Marti nodded. And the federal agent was overheard telling the investors that the government could pile on charges by including numerous other wire transfers.

Outside of court, Hewitt told Scott that he wanted file a motion right away to get his passport back because he has pending travel plans.

Dan Browning • 612-673-4493

Dan Browning • dbrowning@startribune.com