Time to A-Tone for His Sins

A month after his former partner, Philip Bennett, was sentenced to prison for 16 years in the collapse of their commodities brokerage, Tone N. Grant was ordered to spend 10 years in custody.

A federal court jury convicted Grant in March of conspiracy, securities fraud, wire fraud, and money laundering for his role in the collapse of Refco in 2005. The commodities firm failed just months after its initial sale of stock to the public and weeks after accepting a leveraged buyout offer of $1.9 billion from Thomas H. Lee Partners.

Federal prosecutors proved that Bennett and Grant had cooked up an elaborate plan to hide hundreds of millions of dollars of losses run up through its own and its customers' trading.

They did so by concealing the losses as debts owed to Refco by a purportedly separate entity, Refco Group Holdings. Rather than being independent, that holding company controlled Refco and was controlled in part by Bennett and Grant.

Prosecutors said that Grant received $16 million in proceeds from Thomas H. Lee's leveraged buyout, and had the right to share in half of Bennett's profits from any future sale of his Refco stock holdings up to $275 million.

by Mark Stein