Former Refco lawyer Joseph P. Collins was indicted on charges of conspiring to commit securities fraud, wire fraud, bank fraud, money laundering, making false statements to the Securities and Exchange Commission and making material misstatements to auditors.
In the suit, Acting United States Attorney Lev L. Dassin alleges that Collins played an active role in hiding the true financial health of Refco and concealing the economic interest of Austrian bank BAWAG AG’s in the company, which allowed the company to secure fraudulently a line of revolving credit.
According the suit, Collins knowingly negotiated and drafted fraudulent agreements and public filings that resulted in the bank raising more than $2.4 billion from banks, investors and investors.
Refco filed for bankruptcy just two months after its initial public offering when it was discovered that RGHI, a company owned by Refco’s CEO, owed Refco Inc. hundreds of millions of dollars and that he used a series of round trip loans to conceal the debt. According to the suit, Collins knew and hide the fact that Refco and RGHI were related companies.
From 1997 to 2005, Collins’ firm invoiced Refco for $40 million in legal services
Read the indictment, courtesy of Courthouse News
