DISEASE CHARACTERISTICS:

• Diagnosis of multiple myeloma (MM), meeting 1 of the following criteria:
• Previously untreated disease with poor prognosis, meeting 1 of the following criteria:
• Active disease with β2 microglobulin ≥ 5.5 mg/dL
• Inactive disease with peripheral plasma cells OR chromosome 13 or 14 abnormalities by fluorescent in situ hybridization
• Relapsed or refractory disease
• Measurable disease by serum and urine M-protein and/or measurable plasmacytoma

PATIENT CHARACTERISTICS:

Age

• 18 and over

Performance status

• ECOG 0-2* NOTE: *ECOG 3 allowed for patients with bone pain due to MM

Life expectancy

• At least 3 months

Hematopoietic

• Platelet count ≥ 75,000/mm^3 unless plasma cells > 50% in bone marrow
• Any WBC allowed provided plasma cells > 50% in bone marrow

Hepatic

• SGOT and SGPT ≤ 2.5 times upper limit of normal (ULN)
• Bilirubin ≤ 2.5 times ULN

Renal

• Creatinine ≤ 6.0 mg/dL

Cardiovascular

• Absolute QT interval ≤ 460 msec with potassium ≥ 4.0 mEq/L AND magnesium ≥ 1.8 mg/dL
• No conduction defects
• No unstable angina
• No myocardial infarction within the past 6 months
• No congestive heart failure
• No New York Heart Association class II-IV heart disease
• No other significant underlying cardiac dysfunction

Other

• Not pregnant or nursing
• Negative pregnancy test
• Fertile patients must use effective double-method contraception for ≥ 4 weeks before, during, and for ≥ 4 weeks after completion of study therapy
• No blood, ova, or sperm donation during study participation
• No history of grand mal seizures except infantile febrile seizures
• No pre-existing neurotoxicity or neuropathy ≥ grade 2
• No uncontrolled diabetes mellitus
• No active serious infection that cannot be controlled with antibiotics
• No other malignancy within the past 5 years except curatively treated carcinoma in situ of the cervix or nonmelanoma skin cancer
• No other condition that would preclude study compliance or follow up

PRIOR CONCURRENT THERAPY:

Biologic therapy

• Prior thalidomide allowed (in patients with relapsed or refractory MM)
• No prior thalidomide in combination with arsenic trioxide
• Prior epoetin alfa allowed

Chemotherapy

• See Biologic therapy
• Prior arsenic trioxide allowed (for patients with relapsed or refractory MM)
• No concurrent cytotoxic chemotherapy
• No chemotherapy within 2 weeks after completion of study treatment

Endocrine therapy

• Prior steroid therapy allowed (for patients with relapsed or refractory MM)

Radiotherapy

• No concurrent broad-field radiotherapy

Surgery

• Not specified

Other

• Prior and concurrent bisphosphonates allowed
• No other concurrent investigational agents