The guilty verdicts followed a somewhat truncated second trial with fewer counts and less testimony, but one which, by all appearances, lacked the drama in the jury room that ultimately ended with the Second Circuit ordering a new trial.
Collins was Mayer Brown's lead lawyer for Refco, a financial services firm that imploded after revelations that then-CEO Robert Bennett and other top executives misrepresented Refco's financial condition to both Thomas H. Lee Partners, which purchased a majority stake in Refco in 2004, and investors who bought shares in Refco's initial public offering in 2005.
Prosecutors alleged that Collins drafted the documents and gave the legal advice that Bennett and others relied on to mask the fraud and assure investors that all was well. They also alleged that Collins played a key role in the deception that persuaded the Austrian bank BAWAG to provide a huge loan to the company in 2002.
In his first trial, Collins, represented by Schwartz and Bach, testified over several days, taking the witness stand to declare that Bennett and his cohorts concealed from him the fact that ostensibly two-way loans had an unseen, third prong that hid the firm's massive debt.
"They lied to me about the purpose" of the loans, Collins told the jury during his 2009 trial. "They lied to me about the third leg. They never told me they were hiding it from their auditors" (NYLJ, June 19, 2009).
Collins testified he didn't know that Refco was parking debt in a holding company, RGHI, which was partially owned by Bennett, in a series of sham loan transactions. He testified that it was not his job to police the company and that he didn't structure or even spend much time reviewing the loans, leaving the bulk of the work to Mayer Brown associates.
Instead, Collins said, he relied on representations about the loan made by Bennett and others, including Tone Grant, the former president of Refco Group Ltd.
Bennett is serving a 16-year prison sentence after pleading guilty. Grant was found guilty by a jury and was sentenced to 10 years behind bars.
Change in Strategy
The second trial, which began on Oct. 10, was different from the first in a number of critical aspects.
Collins elected not to testify this time. Schwartz and Bach, declined to comment on the change in strategy.
But Preska allowed prosecutors to read to the jury portions of Collins' testimony from the first trial, about one hour's worth, and show the jury a videotaped deposition of Collins.
In the first trial, lawyers who testified for the government, including John Sullivan of McDermott Will & Emery and Jay Tabor of Weil, Gotshal & Manges, were allowed by Judge Leonard Sand to offer opinion testimony. This time, Preska indicated that opinion testimony would not be allowed, and the government declined to offer it.