Former Mayer Brown partner gets seven years for Refco fraud

In July last year, Joseph Collins was convicted of a single count of conspiracy to commit securities fraud. The former head of Mayer Brown’s derivatives group was also found guilty on four substantive counts of securities fraud and wire fraud (13 July 2009).

Yesterday Judge Robert Patterson of the Southern District of New York described Collins’ actions as “a case of excessive loyalty to his client”.

Collins did not personally profit from the fraud, the court heard, but was found to have played a key role in Refco’s fraud. Judge Patterson added that the fact Collins was a lawyer meant a lengthy sentence was required to deter others in similar positions from doing the same.

Collins claimed he knew nothing about the debt of more than $2.4bn that was hidden by Refco managers including chief executive Phillip Bennett, now serving 16 years in prison, and former president Tone Grant, serving 10 years.

Collins, who resigned from Mayer Brown last year, remains free on bail and is seeking a new trial.