Bennett Confidant Wore Many Hats at Refco

Updated from 2:29 p.m. EST

Refco's(RFXCQ) former corporate secretary, a close confidant of ousted CEO Phillip Bennett, is emerging as a critical figure in the accounting scandal that led to the brokerage's collapse, TheStreet.com has learned.

Philip Silverman, an accountant who has held a number of top jobs at Refco for nearly a decade, was put on leave last month, say two people familiar with the investigation by federal prosecutors and securities regulators. His leave began around the same time Refco announced it had ousted Bennett and former president Santo Maggio.

The firm booted Bennett and Maggio on Oct. 10 after discovering that Bennett allegedly had been cooking Refco's books for years by hiding hundreds of millions of dollars in uncollectable debts owed to Refco. Maggio allegedly had knowledge of the debt-hiding scheme.

Silverman also may have information about the scheme, which federal prosecutors say made Refco appear financially stronger than it really was and enabled the brokerage to become an attractive IPO candidate.

Last week, a federal grand jury indicted Bennett on eight counts of securities fraud and conspiracy to commit securities fraud. Prosecutors allege Bennett orchestrated a seven-year plot to hide more than $700 million in trading losses rung up by Refco customers in a separate company he controlled, Refco Group Holdings Inc.

Silverman, besides his official duties at Refco, is said to be close to Bennett. He served as the corporate secretary for Refco Group Holdings, the Bennett-owned company at the center of the scandal. One person familiar with the investigation described Silverman, 51, as acting as "Bennett's personal accountant" at times.

Silverman, reached Wednesday morning at his New Jersey home, declined to discuss the scandal, saying, "I'm sorry, can't comment."

Meanwhile, Maggio is cooperating with the investigation, sources say.

Two weeks ago, the Financial Times reported that an unidentified employee, who may have done the bookkeeping that allowed Bennett to conceal the customer trading losses, had been put on leave by the brokerage. Sources say Silverman is the unnamed employee referred to in that story.