Yevgeny Ishchenko was detained May 30 and is facing charges of abusing his post and illegal business activities.
Ishchenko who is suspected of embezzling funds from Volgograd communal services said his criminal case was politically motivated.
His lawyers insisted on his immediate release and claimed there was no evidence proving that their client had threatened anyone and was planning to escape.
The lawyers also said they would appeal against the court's ruling.
Prosecutors said, however, that Ishchenko should remain in custody as he "could influence the preliminary investigation and witnesses and could escape."
A court has already sanctioned the arrest of Volgograd communal services former board chairman Dmitry Sinyukov, chief engineer Mikhail Gushchin, and director Tatiana Baranenko, as well as Yelena Polushina, a senior official from a local bank, Noksbank. All four face fraud charges.
Investigators say the suspects were involved in fraudulent activities to the tune of 15.5 million rubles (some $575,000).
