Posted Jul 16, 2013 03:45 pm CDT
A former partner of Mayer Brown was sentenced Monday to a year and a day in federal prison for his role in a $2.4 billion fraud on investors in Refco Inc.
Joseph P. Collins, 62, was allowed to remain free pending his appeal in the Manhattan federal court case, reports Bloomberg. Once the chief outside lawyer for the commodities brokerage, he was convicted last year of conspiracy and securities and wire fraud charges related to a securities fraud perpetrated by Refco executives on investors. It involved concealing the company’s true financial condition from investors who helped Refco raise some $670 million in an initial public offering a few months before the company collapsed in 2005.
“There’s no doubt that, but for this matter, Mr. Collins is a certifiable saint,” said U.S. District Judge Loretta Preska, citing his record of charitable works. “In this case, a lengthy prison sentence is not necessary.”
Collins had claimed he had no knowledge of the scheme perpetrated by senior executives of Refco, including the company’s former chief executive officer, Phillip Bennett. Three pleaded guilty and one has since died. The two survivors are serving sentences of 16 years, in Bennett’s case, and 10 years, for a former president of the company.
The judge said she viewed the other defendants as “Refco insiders,” in contrast to Collins, who neither profited in any way from the scheme nor had any direct involvement in it.
It is unusual to see a corporate lawyer prosecuted for his work as a legal advisor concerning a client’s fraud, notes Reuters.
In an unrelated case, former partner David Tamman of Nixon Peabody was found guilty after a November federal bench trial in Los Angeles of helping a client investment fund manager cover up a $20 million Ponzi scheme. He has not yet been sentenced.
ABAJournal.com: “Ex-Mayer Brown Partner Joseph Collins Guilty on 7 Counts in Case re Fraud By Former Refco Execs”
ABAJournal.com: “Ex-Nixon Peabody Partner Is Convicted of Altering Documents to Protect Ponzi-Scheme Client”
Associated Press: “US lawyer gets year in prison in Refco fraud”