SANTA ANA, Calif. (AP) An alleged brother-in-law of Osama bin Laden's bodyguard was ordered to be released on $500,000 bail Tuesday, and a Muslim advocacy group said it wants a federal investigation into whether he was arrested because he had refused to become an FBI informant.

Ahmadullah Niazi, 34, appeared in U.S. District Court on charges of lying about alleged ties to terrorist groups on his citizenship application.

U.S. Magistrate Arthur Nakazato ruled that Niazi must submit to electronic monitoring and home detention and surrender his passport and other travel documents. He cannot leave Southern California.

Niazi is an Afghan native and a naturalized U.S. citizen. Authorities allege his sister, Hafiza, is married to Amin al-Haq, identified in court papers as a high-ranking al-Qaida member.

Prosecutors have said al-Haq was believed to have been bin Laden's bodyguard around and after Sept. 11, 2001.

Niazi is accused of lying about alleged ties to terrorist groups on his citizenship application. At his first court appearance last week on the federal charges, Niazi called the charges a "conspiracy."

The Council of American-Islamic Relations, or CAIR, announced Tuesday it would ask Attorney General Eric Holder to investigate whether Niazi's arrest stemmed from his refusal to help the FBI.

CAIR officials said in a statement that they met with Niazi in 2007 and he told them the FBI threatened to make his life a "living hell" if he did not become an informant.

FBI spokeswoman Laura Eimiller said she could not comment on CAIR's assertions, but said Niazi's indictment would speak for itself.

Court documents show that in 2007, Niazi reported a new Muslim convert who allegedly spoke repeatedly of jihad and organizing terrorist attacks. He testified on behalf of the Islamic Center of Irvine, which was seeking a restraining order against the convert.

Shortly after the center was granted the restraining order, Niazi said he was approached by an FBI agent who accused him of lying in that case and pressured him to become an informant, said Issa Edah-Tally, president of the Islamic Center of Irvine. Edah-Tally said he suggested Niazi, whom he did not know well, seek independent legal advice.

Niazi is charged with perjury, procurement of naturalization unlawfully, passport fraud and making a false statement. He could face up to 35 years in prison if convicted of all charges.

Copyright 2009 The Associated Press.