Dec. 7 (Bloomberg) -- Barry Bonds, Major League Baseball's all-time home-run leader, pleaded not guilty to perjury and obstruction of justice for lying to a grand jury about using steroids.

Bonds, whose lawyers entered the plea today in San Francisco federal court, gave his name and said he understood the charges. Prosecutors claim to have evidence that he tested positive for anabolic steroids and other performance-enhancing substances. Bonds told grand jurors in 2003 he never knowingly used banned drugs, according to his indictment.

``Barry Bonds is innocent,'' said defense attorney Allen Ruby, who successfully challenged a government request that Bonds give up his passport. ``He has trust and faith in the justice system. We're confident of a good outcome.''

The 43-year-old outfielder is charged with four counts of perjury and one count of obstruction of justice. The perjury counts carry a maximum sentence of five years in prison and a $250,000 fine; the obstruction charge carries a maximum penalty of 10 years in prison and a $250,000 fine. U.S. Magistrate Judge Maria-Elena James set bail for Bonds at $500,000

The next hearing in the case is Feb. 7. Ruby said he may file a motion to dismiss the indictment claiming it's defective.

Allegations of steroid abuse by athletes led to congressional scrutiny, testing in schools and tougher penalties by sports leagues. They've also raised questions about the validity of some records, especially the career home-run mark of 762 that Bonds set this year.

Federal Judge

The case is presided over by the same federal judge who handled criminal prosecutions involving the California company at the center of a federal steroids probe.

U.S. District Judge Susan Illston handled criminal cases involving Bonds's former trainer and the owners of the Bay Area Laboratory Co-Operative, or Balco, based in Burlingame, California. Illston has said cases are related.

Appearing with Bonds today was attorney Cristina Arguedas, who represents former Apple Inc. General Counsel Nancy Heinen in a stock-options backdating lawsuit by the U.S. Securities and Exchange Commission.

Matt Parrella, a lead prosecutor in the steroids cases, said there may be a ``conflict'' with one of Bonds's attorney because that lawyer has represented witnesses in the steroids probe. He didn't name the attorney.

Tim Montgomery

Arguedas formerly represented Tim Montgomery, the one-time 100-meter world record-holder. Montgomery is serving a two-year ban for using steroids.

``We're not exactly sure what the government is referring to,'' Ruby said of Parrella's conflict allegation. Arguedas didn't immediately return a call seeking comment.

Bonds' indictment came three months after he broke Hank Aaron's record of 755 home runs. The San Francisco Giants said they wouldn't re-sign him when his contract expired at the end of the season. Bonds said he wanted to play at least one more year.

The player told a grand jury in December 2003 that he didn't take anything that he knew was a steroid and denied being given testosterone, human-growth hormones or any injectable substance by his trainer, Greg Anderson, according to the indictment. Those statements were false, prosecutors claimed.

Bonds told the 2003 grand jury that Anderson gave him a cream that the trainer said was flax-seed oil, prosecutors said.

Positive Drug Results

Federal agents obtained positive drug test results for baseball players during a 2004 raid of a California lab that had tested urine samples from Major League Baseball players in 2003, according to a December ruling by the U.S. Court of Appeals in San Francisco. The names of the players whose tests were obtained weren't disclosed.

Steroids are synthetic substances related to male hormones. Doctors prescribe them to patients with abnormally low testosterone and to those suffering from diseases that result in loss of muscle mass, according to the U.S. National Institute of Drug Abuse, part of the National Institutes of Health. Some athletes take steroids to artificially build or repair muscle, allowing for better physical performance.

Anderson pleaded guilty in 2005 to federal charges of conspiring to distribute steroids and money laundering. He spent three months in jail for his 2005 conviction and was imprisoned again in July 2006 for contempt after refusing to testify before a grand jury. He was ordered released last month.

Testosterone Cream

Anderson admitted to conspiring with Victor Conte, founder of Balco, to distribute testosterone cream, human-growth hormone and steroids to unidentified athletes.

Balco Vice President James Valente, track coach Remi Korchemny and Illinois chemist Patrick Arnold also pleaded guilty in the investigation.

Bonds's indictment follows other allegations and disclosures this year of U.S. athletes using performance-enhancing drugs.

Cyclist Floyd Landis said in October he will challenge findings he used synthetic testosterone to win the 2006 Tour de France. He was the first rider stripped of his title in the race.

Also in October, U.S. track-and-field champion Marion Jones gave up her Olympic medals after admitting she took performance- enhancing drugs before the 2000 Games in Sydney.

A report on steroids in baseball is likely to be released this month by George Mitchell, a former U.S. Senate majority leader who was appointed by the sport's commissioner to investigate drug use.

The case is U.S. v. Bonds, 07-CR-00732, U.S. District Court for the Northern District of California (San Francisco).

To contact the reporter about this story: Karen Gullo in San Francisco federal court at kgullo@bloomberg.net.

Last Updated: December 7, 2007 14:32 EST