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Refco Attorney Sentenced to 7 Years

MANHATTAN (CN) - The former outside attorney for Refco, a financial services firm, was sentenced Thursday to 7 years in prison for his role in the defunct company's $2.4 billion fraud. A federal jury convicted Joseph Collins, 59, of Winnetka, Ill., of conspiracy, wire fraud and securities fraud.

As Thomas H. Lee Partners prepared to buy Refco in a $1.9 billion leveraged transaction, Collins colluded with Refco CEO Phillip Bennett "to falsify Refco's financial statements by hiding from the company's auditors an enormous debt owed to Refco by a holding company partially owned by Bennett," the U.S. Attorney's Office said.

Bennett is serving a 16-year prison term. Tone Grant, a former owner of Refco, is serving 10 years. Former CFO Robert Trosten and former executive vice president Santo Maggio have pleaded guilty and are awaiting sentencing.

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