Three former Refco Inc. employees have been charged with fraud and money laundering. Tone N. Grant, a former owner, Philip R. Bennett, former chief executive, and Robert C. Trosten, former CFO, are thought to have cost investors an estimated USD1 billion in losses.
Two of the accused, Bennett and Trosten, had already been charged with conspiracy regarding to securities fraud, false filings and wire fraud. U.S. District Court In Manhattan is says that whilst under the partial control of Grant and Bennett, Refco lost trades which resulted in million dollar losses. Bennet and Grant were then accused of trying to hide the losses by transfering them to accounts under the guise of a holding company that owed Refco money.
All three were then accused of defrauding participants in a Refco buyout. During the course Grant received USD16 million in proceeds.
Lawyers for the accused maintain their innocence, but if convicted they stand to face a prison sentence of up to 50 years.