"Staggering Arrogance" Nets 16 Years

District Judge Naomi Reice Buchwald minced no words as she sentenced former Refco chief executive Phillip R. Bennett, 59, to 16 years in federal prison for his role in the commodities brokerage's spectacular collapse.

And she didn't focus only on Bennett, who at least acknowledged that he had "crossed a line I never should have crossed" and committed "an unacceptable and appalling error in judgment."

She generalized a bit about financial big shots -- "You and others like you," she told Bennett at one point -- who "play a truly high-stakes poker game."

White-collar defendants," Buchwald said from the bench, "are often staggeringly arrogant" and "just don't think they'll get caught."

If Bennett was playing high-stakes poker, he tried to bluff with a weak hand. He led Refco, at the time the biggest independent U.S. futures trader, to a $670 million initial public offering in August 2005. It filed for bankruptcy two months later.

It turned out that a firm controlled by Bennett owed Refco more than $400 million. Bennett had apparently used the outside companies to conceal customers' losses since at least 1997.

Bennett eventually pleaded guilty to 20 crimes, including securities fraud, and accepted responsibility for $1.5 billion in losses.

He will begin serving his sentence on September 4; when he is released he is scheduled to be deported to Britain, where he was born.

by Mark Stein