NEW YORK (Bloomberg) ? Former Refco Inc. chief executive Officer Phillip R. Bennett on Friday told a judge he was innocent of federal charges that he hid hundreds of millions of dollars in unpaid debt.

Bennett, 57, is the only defendant named in an indictment accusing him of conspiracy, securities fraud, wire fraud, and making false filings with the Securities and Exchange Commission. Prosecutors are also seeking to recover at least $700 million from Bennett, representing the proceeds of the alleged fraud.

?I plead not guilty, your honour,? Bennett told US District Judge Naomi Buchwald in New York.

Prosecutors must now provide Bennett?s lawyers with documents and other evidence gathered in their investigation of the collapse of Refco, a futures trader. The conspiracy and securities fraud counts against Bennett, who is free on bail, each carry a maximum penalty of 20 years in prison.

?The investigation is ongoing,? Assistant US Attorney David Esseks told the judge. Esseks said the government will turn over a ?very substantial amount of account records? to Bennett?s lawyers.

Refco filed for bankruptcy on October 17 after Bennett revealed he?d hidden $430 million in debt. Man Group Plc, the world?s biggest publicly traded hedge fund company, won a bankruptcy auction of the customer accounts and assets of Refco?s regulated futures business with a bid of $323 million. US Bankruptcy Judge Robert Drain must approve the sale.

According to the indictment, Bennett, a UK citizen who has lived in the US for 27 years, engaged in a series of transactions aimed at hiding losses incurred by Refco from trading by the firm and its customers.

The indictment traces the fraud to the 1990s, when Refco extended credit to customers who subsequently ?sustained hundreds of millions of dollars in market losses?.

When customers couldn?t repay the loans, Refco assumed their losses and transferred them to Bennett?s privately held company, Refco Group Holdings Inc., or RGHI, the indictment says. The indictment doesn?t say why Bennett did this.

As a result, Refco was owed money from RGHI, the indictment says. At the end of reporting periods, Bennett set out to hide the RGHI debt to Refco from auditors, the indictment says. Bennett did so by engaging in transactions with unidentified customers so that Refco?s books would reflect a debt from the customers and not from RGHI, the indictment says.

The scheme culminated in the August 2005 initial public offering of Refco stock, through which Bennett earned more than $100 million, the indictment says.

Buchwald set the next hearing date for January 18. The judge didn?t set a trial date.

Separately, Bennett was sued by Thomas H. Lee Partners LP, Refco?s largest shareholder, and others since the company?s collapse.