Refco Inc. held offshore accounts with as much as $525 million in fake bonds, indicating the futures broker?s troubles may be more extensive than previously reported, according to four people with direct knowledge of evidence gathered by US prosecutors investigating Refco?s collapse.

New York-based Refco held the securities for Bawag P.S.K. Bank, Austria?s fourth-largest bank, and Liquid Opportunity, an offshore hedge fund, under identification numbers that don?t correspond to registered bonds, said the people, who declined to be identified because the investigations are ongoing. One person said Bawag and Liquid Opportunity had shares in six Anguilla companies, which in turn held the bonds.

The US Attorney in Manhattan and the Securities and Exchange Commission are trying to find out where the bonds originated and how they were valued, the people said.

The bond accounts were at Refco?s Bermuda-based unit, beyond the reach of US regulators. Refco owed creditors $16.8 billion when it filed for bankruptcy protection on October 17, a week after former chief executive officer Phillip Bennett allegedly used a loan from Bawag to pay uncollectible debts he had concealed from investors. Bennett denied wrongdoing. ?These unregulated entities are opaque to the US government,? said Michael Greenberger, a University of Maryland law professor and former head of trading and markets at the Commodities Futures Trading Commission. ?Because there is no handle on them here or in any of the other major financial centres, it?s just that much easier to commit fraud.?

Anthony Clark, an attorney who represents Refco at Skadden, Arps, Slate, Meagher & Flom in Wilmington, Delaware, declined to comment on the bond accounts. ?I?m not saying it did or didn?t happen,? he said.

Vienna-based Bawag declined to answer written questions about the bond accounts, citing legal restrictions and ?banking secrecy?. Bawag doesn?t comment publicly ?on questions which are the subject matter of pending legal proceedings,? Thomas Heimhofer, a spokesman, said in an e-mail. The lender, owned by Austrian trade unions, sued Refco in federal court in Manhattan in November, saying it was duped into extending the 350 million-euro ($421 million) loan to Bennett.

Liquid Opportunity?s fund manager, Jonathan Knight, didn?t respond to four messages left on an answering machine seeking comment. Knight, 36, works in Lake Mary, Florida. David Esseks, the Assistant US Attorney handling the Refco probe, and John Nester, an SEC spokesman in Washington, declined to comment.

US Attorney Michael Garcia in Manhattan accused Bennett of fraud on October 12 after the futures broker disclosed he hid losses. That week, customers abandoned Refco, forcing it to seek protection from creditors. Bennett, 57, pleaded not guilty to federal fraud charges in November. On Tuesday, US Bankruptcy Judge Robert Drain in New York said Refco Capital Markets Ltd., a Refco unit whose customers are owed $4.2 billion, will be liquidated if it can?t develop a plan with its customers and creditors to exit bankruptcy.

US officials haven?t accused Bawag, Liquid Opportunity, Refco or any related individuals of wrongdoing in connection with the bond accounts. Bawag said in a statement today that its total claim against Refco amounts to 392 million euros ($472.5 million). That includes the 350 million euros the bank loaned to Bennett, Bawag spokesman Heimhofer said in an interview. The remaining 42 million euros relates to ?other businesses in connection with Refco,? he said. He declined to elaborate. Bawag plans to filed a claim for the money ?shortly? in Refco?s bankruptcy case, Heimhofer said. He declined to comment further.

Refco?s creditors are hunting for information about six companies based in the British West Indies that may be linked to the bonds that prosecutors are scrutinising. Liquid Opportunity and Bawag held shares in the six companies, which in turn held the bonds, according to a person with knowledge of the Refco accounts who didn?t want to be identified because of the ongoing investigations by the Justice Department and the SEC.