Chicago lawyer convicted in $2.4 billion fraud

Joseph Collins, Refco Inc.'s former outside lawyer, was convicted by a federal jury of helping Chief Executive Officer Phillip Bennett and other executives defraud investors of $2.4 billion.

Collins was convicted on five of 14 counts with which he was charged, including two counts of wire fraud, two counts of security fraud and conspiracy. A U.S. jury in New York returned its verdict July 10, almost two months after the trial began. Jurors, who began deliberating on June 30, were unable to reach a verdict on the other nine counts, and the judge declared a mistrial on them.

Collins, a corporate lawyer who is on leave from Chicago's Mayer Brown LLP, was accused of helping Refco's management conceal transactions from lenders and investors that hid losses incurred by the New York-based firm.

Once the biggest independent U.S. futures trader, Refco collapsed in 2005, two months after raising $670 million in an initial public offering. Refco filed for bankruptcy protection after disclosing that it had transferred more than $1 billion in losses to a firm owned by Bennett.

The case is U.S. v. Collins, 07-cr-1170, U.S. District Court, Southern District of New York (Manhattan).