OBJECTIVES: Primary * Determine the maximum tolererated dose of arsenic trioxide when administered with imatinib mesylate in patients with accelerated or blastic phase chronic myelogenous leukemia or Philadelphia chromosome-positive acute lymphoblastic leukemia. * Determine the rate of complete morphologic remission in the bone marrow of patients treated with this regimen. OUTLINE: This is a phase I dose-escalation study of arsenic trioxide followed by a phase II study. * Phase I: * Induction therapy: Patients receive oral imatinib mesylate once daily on days 1-35 (weeks 1-5) and arsenic trioxide IV over 1-4 hours on days 1-5, 8-12, 15-19, and 22-26 (weeks 1-4). Patients undergo bone marrow evaluation on week 5. Patients achieving a morphologic remission proceed to consolidation therapy. Patients not achieving morphologic remission receive a second course of imatinib mesylate as above on weeks 6-10 and arsenic trioxide as above on weeks 6-9. Patients are re-evaluated on week 10. Patients achieving morphologic remission proceed to consolidation therapy. Patients not achieving a morphologic remission are removed from study. * Consolidation therapy: Patients receive oral imatinib mesylate as in induction therapy on approximately weeks 6-11 (or weeks 11-16\*) and arsenic trioxide IV over 1-4 hours on days 1, 3, 5, 8, 10, 12, 15, 17, 19, 22, 24, and 26 (approximately weeks 6-9 OR weeks 11-14\*). Patients who remain in morphologic remission receive a second course of imatinib mesylate as in induction therapy on approximately weeks 12-17 (or weeks 17-22\*) and arsenic trioxide as above (in consolidation therapy) on approximately weeks 12-15 (or weeks 17-20\*). NOTE: \*For patients who receive a second course of induction therapy Cohorts of 6 patients receive escalating doses of arsenic trioxide until the maximum tolerated dose (MTD) is determined. The MTD is defined as the dose preceding that at which 2 of 6 patients experience dose-limiting toxicity. * Phase II: Patients receive arsenic trioxide at the MTD and imatinib mesylate as in phase I. Treatment in both phases continues in the absence of unacceptable toxicity or disease progression. After completion of consolidation therapy, patients may continue imatinib mesylate off study at the discretion of the physician. Patients who become candidates for stem cell transplantation at any time during the study are removed from study. PROJECTED ACCRUAL: A total of 6-43 patients (6-12 for phase I and 37 \[including 6 patients from phase I\] for phase II) will be accrued for this study within 2 years.
DISEASE CHARACTERISTICS: * Diagnosis of one of the following: * Chronic myelogenous leukemia (CML) in one of the following phases: * Blastic phase\* * Accelerated phase\* * No appropriate donors for stem cell transplantation NOTE: \*Must have received high-dose (600-800 mg/day) imatinib mesylate of no more than 3 months duration * Acute lymphoblastic leukemia * Philadelphia chromosome positive by cytogenetic confirmation * Patients with only bcr-abl-positive disease by polymerase chain reaction are not eligible * \> 10% blasts in the bone marrow * No isolated extramedullary disease PATIENT CHARACTERISTICS: Age * 18 and over Performance status * ECOG 0-2 Life expectancy * Not specified Hematopoietic * Not specified Hepatic * Bilirubin ≤ 2 times upper limit of normal (ULN) * AST ≤ 2 times ULN * INR and PTT ≤ 1.5 times ULN (except for patients on anticoagulation therapy) Renal * Creatinine ≤ 2 times ULN Cardiovascular * Baseline QTc intervals \< 480 ms * No chronic arrhythmias * No active coronary artery disease Other * No chronic electrolyte abnormalities * No prior non-compliance to medical regimens * No patients who are considered potentially unreliable * No active serious infection * No other active malignancies except superficial epithelial cancers * Not pregnant or nursing * Negative pregnancy test * Fertile patients must use effective barrier contraception during and for at least 3 months after study participation PRIOR CONCURRENT THERAPY: Biologic therapy * No prior peripheral blood stem cell or bone marrow transplantation Chemotherapy * Prior hydroxyurea allowed * No other concurrent chemotherapy Endocrine therapy * Not specified Radiotherapy * Not specified Surgery * More than 4 weeks since prior major surgery and recovered Other * Prior anagrelide allowed * No concurrent warfarin for therapeutic anticoagulation * Concurrent low molecular weight heparin is allowed