Articles Posted in Refco

Joseph P. Collins, a former Mayor Brown partner, has been sentenced to seven years in prison for his role in a $2.45 billion investment fraud scheme involving Refco Inc. He had hoped to obtain a more lenient sentence.

In July 2009, a jury found Collins guilty of wire fraud and securities fraud, as well as conspiracy to commit wire fraud, securities fraud, money laundering, bank fraud, and making false filings with the SEC. During his criminal trial, his defense attorneys argued that he did not know about the Refco fraud scam. However, while Southern Judge Patterson said that he believes Collins did not commit his crimes out of greed, Patterson noted what he called the firm partner’s “excessive loyalty” to his biggest client. According to Assistant U.S. Attorney Christopher J. Garcia, Collins brought in over $40 million to his law firm from his work with Refco.

Collins provided legal counsel and drafted documents that Refco principals used to conceal the company’s actual financial state while they made themselves wealthier. The government says that the documents were used to defraud Thomas H. Lee Partners, which owned a majority stake in Refco, and investors who purchased IPO shares in 2005.