Former Refco Chief Executive Phillip Bennett arrived for his sentencing hearing at Manhattan federal court in New York Thursday
Phillip Bennett departed federal court Thursday.
Posted on 07/08/2008 4:52:04 AM PDT by prairiebreeze
NEW YORK -- Phillip R. Bennett, Refco Inc.'s former chief executive officer, was sentenced to 16 years in prison Thursday for his role in a scheme to hide the commodities broker's financial troubles.
At a hearing, U.S. District Judge Naomi Reice Buchwald in Manhattan said white-collar defendants such as Mr. Bennett often "just don't think they'll get caught."
"You and others like you play a truly high-stakes poker game," the judge said.
The judge didn't impose a fine and said restitution will be discussed at a later date. Mr. Bennett has agreed to forfeit essentially all of his assets. The government sought forfeiture of up to $2.4 billion.
Mr. Bennett had pleaded guilty to a 20-count indictment in February just before a trial was to begin. A U.K. citizen, Mr. Bennett will be deported upon completing his prison term.
"Despite the best of intentions, I made an unacceptable and appalling error," Mr. Bennett said.
Prosecutors had alleged that Mr. Bennett and others at Refco schemed to hide the commodity broker's dismal financial picture from its banks, auditors and investors from the mid-1990s to about October 2005.
Mr. Bennett, 59 years old, is expected to report to prison on Sept. 4. Three other former Refco executives have either pleaded guilty or been convicted of criminal charges in the matter. A longtime lawyer for Refco also is facing criminal charges.
Refco sought bankruptcy protection in 2005, shortly after the company announced it had discovered $430 million in debt owed to a private entity controlled by Mr. Bennett, who was arrested on fraud charges.
Austrian bank Bawag PSK reached a deal in June 2006 to settle Justice Department and Securities and Exchange Commission charges that the bank helped Mr. Bennett and others conceal Refco's true financial picture.
(Excerpt) Read more at online.wsj.com ...
Although many at Refco were seriously trying and succeeding in turning around the firm's negative image, I don't believe for one second you were one of them, Mr. Bennett.
Your intentions were mostly fueled by greed and did harm to some innocent hard working people. You got precisely what you deserved.
As I've heard the story, this was done via the quarterly reports. It was actually a newly employed comptroller, hired at just the right (or wrong, depending on your perspective) time of the fiscal quarter, who was burning the midnight oil getting up to speed with his new job that uncovered the irregularities in the accounting.
Interestingly, the two or three firms that were called in to perform due diligence just a couple of months prior to this when Refco stock went public somehow didn't see a thing.
Hmmm...
Test results can be bought. But I share your desire for accountability and integrity in elected / appointed officials.
Phillip Bennett departed federal court Thursday.
hy not lock him up there and then, he has to be a flight risk with 16 years hanging over his head and plenty of hidden assets to enjoy! Obama’s buddy, Tony Rezko asked to be immediately locked up, an incredibly unsual demand, WHY??? to protect Obama? or more importantly to protect his own life??
I’d like to see more goons in suits getting jail terms. A criminal with a position like that can do a lot more damage than a kid boosting stereos.
He’s been ankle-braceleted on house arrest since his arraignment. I’m betting his assets are frozen or being/been liquidated. I don’t believe he’s going anywhere.
>>A U.K. citizen, Mr. Bennett will be deported
>>upon completing his prison term.
Good riddance and send the rest of the NyLon quisling traders with him.
Which reminds me...
Hey BP, GTHOOMC!, ‘cause WE didn’t vote for your monarchies.
Marthat Stewart wasn’t much different IMO. Smaller dollar amount I suppose.
American, UK, Asian, whatever...not so important as integrity.
These guys hid losses and filed false financial statements. What do you think Martha did?
...and now, the rest of the story:
Refco was Hillary Clinton’s silent partner in her $100,000 cattle futures miracle in Arkansas.
Refco went down after a large sum of forged bearer bonds were found in its vaults, in addition to almost half a billion in hidden debt on its books.
Now, here’s a simple mental experiment...ask yourself: IF PRESIDENT BUSH WAS INVOLVED WITH REFCO, WOULD THE REPORTER HAVE MENTIONED THAT FACT?!
No mention of Hillary in that article, though. Double standard.
The Clinton cattle-trading scheme, well, let's just say that Hitlery was not the only beneficiary. This was a routine way for Stevens to route payoffs.
The tactic used to do this was called ''allocation''. Oh, yes, it was improper as hell, and later became outright illegal, but in the 1970s allocation was pretty common in certain areas. Works like this:
During a trading session, a broker buys, say, 500 lots of Dec Live Cattle futures on several tickets. He gets filled at prices ranging from, say, 78.62 to 80.05. The mkt, say, closes at 79.75. AFTER THE CLOSE, the broker assigns whichever contracts are now profitable to favoured accounts, and the contracts that are currently losing to less-favoured accounts.
Now, ultimately, these contracts must be offset (i.e. a sale must be made against them to close them out, because nobody in a payoff scheme wants delivery). So, whether the next day or a couple of weeks hence, the broker does the same thing in reverse: selling 500 lots, then after the close parceling them out to clients involved in the scheme, most favoured getting, again, the best prices.
Please note that, during the 1970s, a LOT of trading accounts were entirely DTN, that is, the citizen gave -- in writing -- the broker complete discretion over how to trade his/her account. Thus, in a number of these allocation schemes, the account holder was completely unaware of what was happening (and, had he/she known about it, probably would have raised holy Hell.)
Almost every abuse of this type has been stopped; 'allocation', particularly, is just a dim historical memory.
Side note: I knew Hitlery's broker, ''Red'' Bone, personally for a number of years. He was as charming a man (except when losing at gin rummy, but that's another story) as you've ever met...as long as you were in some way contributing to his profit. Other than that, his tombstone should read: ''Shake my hand? Count your fingers.''
One other thing: in its early days, REFCO gave many local offices an **enormous** amount of autonomy. In these more-autonomous offices, as long as the books balanced and nobody in the office ran afoul of CFTC, REFCO usually acted as if they couldn't have cared less what else might be going on/have gone on in the office.
Pinging the double standard which is SOP for the left wing mediots in America.
“Refco was Hillary Clinton’s silent partner in her $100,000 cattle futures miracle in Arkansas.
Refco went down after a large sum of forged bearer bonds were found in its vaults, in addition to almost half a billion in hidden debt on its books.
Now, here’s a simple mental experiment...ask yourself: IF PRESIDENT BUSH WAS INVOLVED WITH REFCO, WOULD THE REPORTER HAVE MENTIONED THAT FACT?!
No mention of Hillary in that article, though. Double standard.”
Martha Stewart was a licensed individual in a heavily regulated industry. She used knowlege that wasn’t public to influence trading decisions. She then ordered the jr. broker to hide the trade (cover up) and then lied to the feds about doing it.
She knew better.
I expect a lot better from somebody on the NYSE Board of Governors.
Thanks for adding the description of 1970’s trading practices to the thread.
Where did she get that information? How is that close to what the Refco guys did?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.