Anti-thymocyte Globulin and Melphalan in Treating Patients With Relapsed Multiple Myeloma

DISEASE CHARACTERISTICS: * Diagnosis of multiple myeloma \- Relapsed disease * Must not be a candidate for stem cell transplantation, has refused transplantation, or has had stem cells collected previously * Measurable disease, defined by ≥ 1 of the following: * Serum monoclonal protein ≥ 1.0 g by protein electrophoresis * More than 200 mg of monoclonal protein in the urine on 24 hour electrophoresis * Serum immunoglobulin free light chain ≥ 10 mg/dL AND abnormal serum immunoglobulin kappa to lambda free light chain ratio * Monoclonal bone marrow plasmacytosis ≥ 30% (evaluable disease) PATIENT CHARACTERISTICS: * Eastern Cooperative Oncology Group (ECOG) performance status 0-3 * Absolute neutrophil count ≥ 1,000/μL * Platelet count ≥ 75,000/μL * Hemoglobin ≥ 8.0 g/dL * CD4 \> 100/μL * Creatinine ≤ 3 mg/dL * Not pregnant or nursing * Negative pregnancy test * Fertile patients must use effective contraception * No active malignancy with the exception of nonmelanoma skin cancer or in situ cervical or breast cancer * No uncontrolled infection * No other co-morbidity that would interfere with patient's ability to participate in trial PRIOR CONCURRENT THERAPY: * No limit to prior therapy * At least 4 weeks since prior melphalan or other myelosuppressive agents * At least 2 weeks since prior non-myelosuppressive agents (e.g., thalidomide or high-dose corticosteroids) * No concurrent high-dose corticosteroids * Concurrent chronic steroids (maximum dose 20 mg/day prednisone equivalent) allowed if they are being given for disorders other than amyloid (e.g., adrenal insufficiency or rheumatoid arthritis) * Concurrent continuation of low level/stable steroid doses for replacement or inhalation therapy allowed * Concurrent bisphosphonates allowed * No concurrent immunosuppressive medications such as cyclosporine * No other concurrent investigational treatment * No concurrent cytotoxic chemotherapy or external-beam radiotherapy\> * No other concurrent systemic anti-neoplastic therapy including, but not limited to, immunotherapy, hormonal therapy, or monoclonal antibody therapy * No concurrent prophylactic hematopoietic growth factors (unless for treatment of an established cytopenia)