OUTLINE: Patients receive arsenic trioxide IV continuously and oral ascorbic acid once daily on days 1-5 in week 1 and twice weekly in weeks 2-12 and oral thalidomide once daily in weeks 1-14. Treatment with arsenic trioxide, ascorbic acid, and thalidomide repeats every 14 weeks for up to 4 courses in the absence of disease progression or unacceptable toxicity. Patients also receive oral dexamethasone once daily on days 1-4. Treatment with dexamethasone repeats every 28 days.