- The Washington Times - Friday, August 8, 2008

NEW YORK | The former owner of one of the world’s biggest commodities brokerages was sentenced to 10 years in prison Thursday for a fraud that cost investors more than $2 billion.

Tone N. Grant, 64, of Chicago, was convicted in April in a scheme to defraud investors at Refco Inc., a large financial services company that offered securities, derivatives and commodities brokerage services to investors.

Prosecutors said Grant conspired with former chief executive Phillip R. Bennett and others to transfer debts to accounts that made it seem as if they were debts owed to Refco. Bennett was sentenced last month to 16 years in prison after apologizing for the fraud.

Grant offered no apology, telling U.S. District Court Judge Naomi Reice Buchwald he had “always done everything in my power and control to protect the law … and be a positive influence on the lives of others.”

His lawyer, Roger Zuckerman, blamed Bennett for the fraud and argued for no more than three and a half years in prison.

The judge said Grant had clearly lied about the state of Refco’s finances. She called it a “gross understatement of the facts” to portray Grant as out of the loop since the pivotal transactions could not be carried out without his signature.

The plot unraveled in October 2005, just two months after Refco went public, when Refco announced it had discovered it was owed $430 million by a company controlled by Bennett. Refco’s stock value plummeted and it was forced into bankruptcy proceedings a week later.

Prosecutors say Bennett and Grant directed a series of transactions every year from 1999 through 2005 to hide losses from Refco’s auditors and others.

Before its fall, Refco was one of the world’s biggest commodities brokerages, employing some 2,400 employees in 14 countries.

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