The criminal case against a prominent Island businessman facing indecent assault charges will go to trial after a disagreement over terms of a plea bargain Friday morning.

Steven A. Schwab, 65, a former Chilmark resident, originally pleaded guilty in Edgartown district court Friday to charges in Chilmark and Tisbury of two counts of open and gross lewdness, assault and battery, and indecent assault and battery on someone younger than 14.

Mr. Schwab, a well-known Island insurance executive, was arrested in April on charges that he allegedly exposed himself to his niece over a period of time when she was between seven and nine years old.

The alleged victim and her mother were in court Friday morning, where the girl’s mother read an emotional statement to Judge H. Gregory Williams. Cape and Islands assistant district attorney Laura Marshard sought a jail sentence.

While Mr. Schwab admitted the basics of the charges were true, he disagreed with some of Ms. Marshard’s description of the case, and Mr. Schwab’s attorney Charles Morano agreed with most of the commonwealth’s recommendations.

But Mr. Morano argued against a jail sentence, saying that his client has sought treatment, has already been punished and needs help instead of jail time. “I suggest this man has been punished a lot already . . . he has been ostracized from the community . . . he has lost everything,” Mr. Morano said. “He needs help, he doesn’t need to go to jail. His life has been ruined by his own actions.”

Ms. Marshard had an opposite view. “He took advantage of that little girl not once but over and over again. There has to be a message . . . . Punishment and deterrent from this behavior in our community,” she said.

In the end Judge Williams rejected the defense recommendation and found for a sentence of two and a half years in a house of correction with one year to serve, balance suspended five years, as well as other conditions.

As the judge was speaking, a court officer quickly moved in to put handcuffs on Mr. Schwab, but the judge ordered him to take them off. Mr. Morano rejected the sentence, and a trial in the case was scheduled for Dec. 10.

Mr. Morano and Mr. Schwab both declined comment.