The attorney, accused of helping hide hundreds of millions of dollars in debt from investors, denied wrongdoing.
The roots of the case stretch back to 1997, when Refco began hiding massive losses sustained by clients in the Asian debt crisis.
With its viability threatened, Refco began masking its true performance by moving more than US$1 billion in debt off the company's books to a Bennett-controlled entity, Refco Group Holdings Inc, prosecutors said.
In return, Refco Group Holdings gave Refco worthless IOUs, prosecutors said.
The indictment said the company hid the scam from Thomas H Lee, which paid US$507 million for a 57 percent stake in Refco in 2004; from banks and debt holders that extended more than US$1.4 billion in financing in 2004; and from investors who paid US$583 million for shares when Refco went public.
Bennett's ultimate aim was to lure a potential purchaser into buying the firm at a price that would pay off Refco's debt and ensure a profit to its owners, prosecutors said.
Bennett received help in the scam from some customers and from Vienna-based Bawag PSK Bank, which bought a stake in Refco in 1999, prosecutors said. In 2006, Bawag agreed to pay US$675 million to avoid criminal prosecution. The payment also resolved lawsuits by the Securities and Exchange Commission and investors.
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