New Focus in Refco Inquiry

In the arrangement, a Refco subsidiary would loan money, say $250 million, to Liberty Corner. On the same day, Liberty Corner would loan the same amount of money to Refco Group Holdings, the entity controlled by Bennett. Liberty Corner charged a higher interest rate on the second loan, allowing it to profit from the arrangement.

On Refco's books, the transaction appeared as a debt owed by Liberty Corner, even though Bennett's company had effectively paid off the debt for the hedge fund.

Kevin Marino, a lawyer for Liberty Corner, has maintained all along that his client did nothing wrong and believed the transactions were legitimate because they had been set up by lawyers with Mayer Brown Rowe & Maw, one of the nation's largest law firms.

In fact, a letter from Mayer Brown to Liberty Corner, which outlined the parameters of the transactions, made reference to a transaction with an entity named "Delta,'' according to people who have seen the document.