NEW YORK (Bloomberg) — Former Refco Group Ltd. president Tone Grant, a decorated US Marine Corps veteran, entered a US prison to begin serving a ten-year sentence for defrauding investors of $2.4 billion in an eight-year accounting scheme.

Grant, 64, was convicted in April by a jury in Manhattan federal court of scheming to deceive banks, auditors and investors, including buyout firm Thomas H. Lee Partners LP.

"He arrived today at the federal prison camp in Duluth, Minnesota," Traci Billingsley, a spokeswoman for the US Bureau of Prisons, said in an interview.

Once the biggest independent US futures trader, New York- based Refco collapsed in 2005 two months after raising $670 million in an initial public offering. Refco Inc., as it was known after the IPO, filed one of the biggest bankruptcies in US history after disclosing that a firm owned by Refco chief executive officer Phillip Bennett owed the company hundreds of millions of dollars.

Refco's Bermuda-based unit, Refco Capital Markets, was at the centre of the collapse.

Grant, a former Yale University quarterback and Marine officer in Vietnam, was found guilty of conspiracy, securities fraud, wire fraud, bank fraud and money laundering. His lawyers said at the trial that he was chiefly a salesman who didn't focus on the details of Refco's accounting and was duped by Bennett.

A federal appeals court on Tuesday denied Grant's request to remain free while his appeal is pending. The prison camp, which houses minimum security male offenders, is on a former US Air Force base north of Duluth, about halfway between Minneapolis and the US-Canadian border.

Bennett, who prosecutors said was the mastermind of the fraud, began serving a 16-year sentence on September 4. He pleaded guilty in February.

Prosecutors said Bennett, 60, was the leader of a fraud that duped lenders and investors, and that Grant and others helped him. At the trial, they said Grant joined Bennett in 1997 in hiding tens of millions of dollars in customer trading losses.

Later, their goal was to sell Refco at a price that would pay off the accumulated debt and ensure them a profit, prosecutors said.

The scheme ran from 1997, when Grant was president, to October 2005, a year after Refco sold a majority stake to Boston-based Thomas H. Lee Partners for $1.8 billion. Grant was fired as Refco president in 1999. He owned as much as 50 percent of the company before the buyout.

In addition to hiding losses, prosecutors said, Bennett and Grant lied to Refco's lenders and investors about whether the firm had a proprietary trading operation. They also inflated revenue and moved expenses off Refco's books, prosecutors said.