A former Mayer Brown partner has been found guilty of covering up $2.4billion of debt because the company concerned was such a good client.
Joseph Collins's conviction is just part of the ongoing investigation into the now bankrupt financial services company Refco. The prosecution claimed he had conspired to hide the massive debts accumulated by Refco in a series of bogus loan transactions which he drew up. He was convicted of conspiracy to commit securities fraud, bank fraud, wire fraud, money laundering and making false filings with the Securities and Exhchange Commission. Not bad for just one man.
Collins had claimed that he knew nothing about the debts and that he had been lied to by senior executives of Refco. However, the company's former Chief Financial Officer and former Vice President both testified that Collins had been well aware of the $2.4billion black hole and had been fully involved in the attempt to convince auditors that the company was in better shape than it really was. The prosecution claimed he had gone along with the scheme to hide the debt as Refco was his biggest client and he faced losing $40million worth of business if he lost them.
The jury was out for seven days and the judge had to finally accept a partial verdict. Collins was found guilty on five counts although the jury couldn't come to a decision on a further nine. He will be sentenced in November and could, in theory at least, be facing 85 years in jail.
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Joseph Collins's conviction is just part of the ongoing investigation into the now bankrupt financial services company Refco. The prosecution claimed he had conspired to hide the massive debts accumulated by Refco in a series of bogus loan transactions which he drew up. He was convicted of conspiracy to commit securities fraud, bank fraud, wire fraud, money laundering and making false filings with the Securities and Exhchange Commission. Not bad for just one man.
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Joseph Collins suddenly has a lot more time on his hands |
Collins had claimed that he knew nothing about the debts and that he had been lied to by senior executives of Refco. However, the company's former Chief Financial Officer and former Vice President both testified that Collins had been well aware of the $2.4billion black hole and had been fully involved in the attempt to convince auditors that the company was in better shape than it really was. The prosecution claimed he had gone along with the scheme to hide the debt as Refco was his biggest client and he faced losing $40million worth of business if he lost them.
The jury was out for seven days and the judge had to finally accept a partial verdict. Collins was found guilty on five counts although the jury couldn't come to a decision on a further nine. He will be sentenced in November and could, in theory at least, be facing 85 years in jail.