Judge Indicates He’ll Send Boesky to Jail
Ivan F. Boesky has been working with homeless men under an assumed name and faces bankruptcy, lawyers for the disgraced stock speculator have said in urging that he be given a lenient sentence.
But the judge has indicated that he will give Boesky a term of at least six months despite his extensive cooperation in the government’s insider trading probe.
The exchange came during an unpublicized hearing last week, at which Boesky’s lawyers asked that his twice-delayed sentencing, now scheduled for Dec. 18, not be postponed again.
A transcript of the Thursday morning, in-chambers hearing before U.S. District Judge Morris E. Lasker was supplied by the U.S. Attorney’s office Monday.
Among its revelations were claims by Boesky’s lawyers that:
- Boesky has used an assumed name in his work with the homeless because his notoriety caused several charitable groups to reject his offers of volunteer service.
- Boesky’s wrongdoing “has caused enormous tensions” in his family life and he now faces bankruptcy.
- He “cannot walk down the street without being pointed to.”
- Boesky was not taking courses at Jewish Theological Seminary to curry favor but because “he is contrite. He is not a born-again Jew.”
Boesky, 50, was one of Wall Street’s leading takeover speculators when he agreed last year to pay a record $100 million in civil penalties to settle a Securities and Exchange Commission insider trading action.
The revelation rocked the nation’s financial community, and in a plea bargain with the government, Boesky supplied information leading to guilty pleas by others, including merger specialist Martin A. Siegel and former brokerage executive Boyd L. Jefferies.
In return for his continuing cooperation, Boesky was allowed to plead guilty last April to a single count of conspiring to make false statements to the SEC.
He faces a maximum five-year sentence, but defense attorney Leon Silverman argued that Lasker should be lenient on Dec. 18 because Boesky came forward and cooperated with the federal insider trading probe.
Silverman said even the government’s pre-sentencing memo noted Boesky’s “remarkable and extensive cooperation.”
Assistant U.S. Attorney John Carroll said the government was making no sentencing recommendation but admitted: “Prior to Mr. Boesky’s walking in the door . . . we had never seen anything like this.”
He called Boesky’s crimes “serious, extensive, systemic,” but said that they involved “more than simple insider trading.
“The larger crimes here in our view are crimes that Mr. Boesky has engaged in largely at the behest of others,” said Carroll, adding that prosecutors “named names and gave details” in their pre-sentencing memo.
Lasker sealed that memo “because it refers to ongoing investigations and revelations which would interfere with law enforcement.”
Lasker said he was reviewing the sentencing of investment banker Dennis B. Levine, who got a two-year prison term for insider trading after turning informant.
But Silverman said Boesky’s cooperation “is infinitely greater. He has saved the government millions of dollars, years of time, he has . . . stopped continuing wrongdoing on the part of others, has permitted the government . . . to make a major impact on the securities industry.”
Silverman added: “It would be wrong to treat Mr. Boesky worse than Levine.”
He also asked Lasker to consider sentencing Boesky to community service instead of prison or splitting his sentence between the two.
But Lasker called that inappropriate “if for no other reason than a split sentence would limit the period of imprisonment” to six months. “I just don’t see that in the cards in spite of your presentation,” the judge said.
In his only comment, Boesky told the judge: “I just want to say that I am deeply ashamed and I do not understand my behavior.
“I have spent the last year trying to understand how I veered off course. I would like the opportunity as I go forward to redeem myself and leave this earth with a good name. That is what I want.”
Silverman said the Dec. 18 sentencing should go forward because, in effect, Boesky has been incarcerated for a year and a half.
“He cannot walk down the street without being pointed to. He can’t go into a restaurant. He can’t use a credit card without having people rush up to him,” Silverman said.