NEW YORK (Bloomberg) - Refco Inc.'s former chairman Phillip Bennett, who faces possible life in prison after pleading guilty to fraud and conspiracy in a scheme that cost investors $2.4 billion, may have helped the defence of two ex-colleagues set for trial next month over their alleged roles in the crime.

Mr. Bennett's plea on Friday in Manhattan federal court came a month before he was to be tried with the two men for deceiving banks, auditors, and investors, including Boston-based buyout firm Thomas Lee Partners LP. Ex-Refco finance chief Robert Trosten and former president Tone Grant have pleaded not guilty to helping Mr. Bennett, and will face trial March 17.

"I know I was wrong, and I deeply regret it," Mr. Bennett, told US District Judge Naomi Buchwald, his voice cracking as he spoke. "I take full responsibility for my conduct."

His admission of responsibility may help Mr. Trosten and Mr. Grant by enabling them to claim Mr. Bennett alone was behind the fraud. Their former boss, a British citizen, did not agree to co-operate with the government and is unlikely to appear as a prosecution witness at trial.

Mr. Trosten's lawyer, Robert Morvillo, and Mr. Grant's lawyer, Aitan Goelman, declined to comment. Mr. Bennett still faces civil lawsuits filed by investors, as do Mr. Trosten, Mr. Grant, and Refco's auditors and underwriters.

Once the biggest independent US futures trader, Refco collapsed in October 2005, two months after raising $670 million in an initial public offering. The New York-based firm, which also provided clearing and prime brokerage services, filed for bankruptcy days after disclosing that a Bennett-controlled firm owed hundreds of millions of dollars to Refco.

Mr. Bennett, 59, pleaded guilty to all 20 counts in a federal indictment, including securities and wire fraud, conspiracy, money laundering and bank fraud.

The plea did not involve any promises regarding leniency. Defence lawyer Gary Naftalis alerted prosecutors on February 14 that Mr. Bennett wished to plead guilty, assistant US attorney Neil Barofsky said.

Under US guidelines, Mr. Bennett faces life imprisonment with a maximum penalty of 315 years, as well as forfeiture of $2.4 billion, prosecutors said.

Mr. Bennett, who has only $20 million according to Mr. Naftalis, will be sentenced May 20. Defence attorneys will likely argue that, because he pleaded guilty to all the charges without a government deal, Mr. Bennett should receive a prison term that won't keep him in jail for life.

"Bennett has candidly acknowledged his involvement in the matter," Mr. Naftalis said after the plea. "He was forthcoming and candid and wants to put this matter behind him."

Ms. Buchwald said Mr. Bennett faces a stiff sentence and noted that defendants in the "post-Enron era" of corporate crime prosecutions face the "possibility that their residence in the Bureau of Prisons is the last residence they're going to have."

At least 16 corporate executives have been sentenced to 20 years or more in prison since 2003, according to court records.

Daniel Marino, the former finance chief of bankrupt hedge-fund firm Bayou Group LLC, was sentenced to 20 years in prison last month for defrauding investors of more than $400 million.

Former WorldCom Inc. chairman Bernard Ebbers received 25 years for accounting fraud and Enron Corp.'s ex-CEO Jeffrey Skilling got a 24-year term for the same crime.

Ms. Buchwald said Mr. Bennett must remain at his home in Somerset County, New Jersey, subject to electronic monitoring, until sentencing. Since he is not a US citizen, he will be deported after serving his prison term, she said. Mr. Bennett has been free on $50 million bail since his October 2005 arrest.

Mr. Bennett, a graduate of Cambridge University in England, built Refco into the largest independent futures brokerage in the US. He joined the firm in 1981 and served as president, CEO and chairman since September 1998.

Along with Mr. Grant, who also served as president, Mr. Bennett transformed Refco from a firm that focused on trading for itself to one that executed transactions for clients.

The roots of the case stretch back to 1997, when Refco began hiding massive losses sustained by clients in the Asian debt crisis.

With its viability threatened, Refco began masking its true performance by moving more than $1 billion in debt off the company's books to a Mr. Bennett-controlled entity, Refco Group Holdings Inc., prosecutors said. In return, Refco Group Holdings gave Refco worthless IOUs, according to the government.

The indictment alleged that the company hid the scam from Thomas Lee, which paid $507 million for a 57 percent stake in Refco in 2004; from banks and debt holders that extended more than $1.4 billion in financing in 2004; and from investors who paid $583 million for shares when Refco went public.

Mr. Bennett's ultimate aim was to lure a potential purchaser into buying the firm at a price that would pay off Refco's debt and ensure a profit to its owners, prosecutors said. Mr. Bennett earned $3.3 million in salary and bonus in 2005.

"From as early as the mid-1990s, Refco, which was then privately held and controlled in part by Mr. Bennett, sustained hundreds of millions of dollars of losses through its own and its customers' trading," Manhattan US attorney Michael Garcia said on Friday in a statement. "To hide the existence of those losses, Bennett transferred many of them to appear as a debt owed to Refco by Refco Group Holdings Inc., the holding company that controlled Refco and was in turn controlled by Bennett."

In his plea, Mr. Bennett admitted that he conspired with "other Refco executives," whom he didn't name, to conceal the size of the receivables owed to Refco.

He said he deceived his auditors, investors and lenders, including Thomas Lee and a unit of HSBC Holdings plc., Europe's biggest banks by market value.

Mr. Bennett received help in the scam from some customers and Vienna-based Bawag PSK Bank, which bought a stake in Refco in 1999, prosecutors claimed. In 2006, Bawag agreed to pay $675 million to avoid criminal prosecution.

The payment also resolved lawsuits by the Securities and Exchange Commission and investors.

Santo Maggio, the former CEO of Refco's offshore unit, pleaded guilty to fraud and conspiracy on December 19 as part of the case.

His plea came a day after federal prosecutors unsealed an 11-count fraud and conspiracy indictment against former Refco outside lawyer Joseph Collins. The attorney, accused of helping hide hundreds of millions of dollars in debt from investors, denied wrongdoing.