NEW YORK (Bloomberg) ? Bawag PSK Bank aided in the fraud by ex-Refco Inc. chief executive officer Phillip Bennett and should return more than $1.3 billion he transferred to the Austrian bank, Refco creditors say in court papers filed in New York.

Refco?s unsecured creditors claim Bennett shifted the funds in August, 2004 to Refco Group Holdings, a company he controlled that wasn?t affiliated with Refco, and later moved the money to Bawag.

Bennett, 57, pleaded not guilty to fraud charges stemming from disclosures he hid $430 million in company debt. Refco, a New York-based futures broker, filed for bankruptcy in October.

?Bawag was not an innocent recipient of the transfers,? said Luc Despins, a lawyer representing the creditors committee, in papers filed in US Bankruptcy Court in Manhattan.

?Bawag was guilty of aiding and abetting of Bennett?s wrongful activities, whereby Bawag was unjustly enriched.?

The creditor panel yesterday filed a counterclaim that seeks to recover the $1.3 billion from Bawag.

US bankruptcy law allows creditors to retrieve fraudulent transfers of funds.

Last week Sphinx Managed Fund agreed to pay Refco creditors $263 million to settle a suit claiming the fund wrongfully withdrew money from a Refco unit before its bankruptcy filing.

Bawag spokesman Thomas Heimhofer declined to give an immediate comment.

Refco and 23 affiliates listed $16.5 billion in assets and $16.8 billion in debt in their October bankruptcy filing, one week after Bennett revealed that he hid $430 million of debt on Refco?s books.

Bawag lent Bennett about $420 million to repay the debt to Refco. On November 16, Bawag sued Bennett and other Refco directors to recover the money.

Bawag was ?an active participant in Bennett?s scheme to hide? uncollectible bad debts in its financial reporting from February 2000 through February 2005, Despins said in court papers.

Jeffrey Merch, one of Refco?s unsecured creditors, said the committee needs to aggressively pursue recoveries for all creditors.

?We are all victims here,? Merch said. ?Anything that helps staunch the bleeding is welcome.?

Bawag is up for sale after disclosing in March that it used offshore companies in Anguilla and accounts at Refco to mask 1 billion euros ($1.24 billion) in hedge fund losses.

Austrian authorities have issued an arrest warrant for Bennett and are seeking one for Bermuda homeowner Wolfgang Flottl ? the son of a former chief executive of Bawag ? in connection with the Bawag scandal.