04/07/2008

Ex-Refco CEO sentenced

Former Refco Chief Executive Officer Phillip Bennett was sentenced to 16 years in prison for defrauding investors out of $2.4bn and destroying the world's largest independent commodities broker in what US prosecutors said was “among the very worst'' white-collar crimes.

Bennett was also ordered to forfeit the $2.4bn. US District Judge Naomi Buchwald in Manhattan rejected a government request that Bennett surrender to prison immediately and told him to report on 4 September. Until then, he must remain at his home in Somerset County, New Jersey, subject to electronic monitoring.

Bennett, who turns 60 this month, pleaded guilty in February to bank fraud and money laundering stemming from his eight-year scheme to deceive banks, auditors and investors, including Boston-based buyout firm Thomas H. Lee Partners LP.

Once the biggest independent US futures trader, New York- based Refco collapsed in October 2005, two months after raising $670 million in an initial public offering. The company, which provided clearing and prime-brokerage services, filed for bankruptcy after disclosing that a Bennett-controlled firm owed hundreds of millions of dollars to Refco.

Some 16 corporate executives have been sentenced to 20 years or more in prison since 2003.