Boesky Seeks Cut in Prison Term; More Indictments Hinted

Lawyers for Ivan F. Boesky have asked the sentencing judge to reduce his three-year prison term, claiming that the stock speculator’s help in exposing Wall Street crime is far more significant than earlier thought and would serve “the dictates of justice and mercy.”

In a 32-page document to support their plea, lawyers Leon Silverman and Robert McCaw indicated that Boesky’s disclosures might result in new indictments by October.

The lawyers also disclosed that Boesky was physically protected by federal officials from a death threat before he began serving his sentence last month. They also claimed that Boesky was tailed and harassed by others he has implicated in financial felonies.

“Mr. Boesky has been asked, and has volunteered, information about topics, people, relationships, transactions and securities that were not the subject of pre-sentence debriefing sessions,” the document said. “He has suggested new avenues of inquiry for government investigators.”

The document, filed with U.S. District Judge Morris Lasker last Friday and made available by his office Wednesday, marked one of the clearest public indications to date that Boesky’s disclosures will result in a broad range of indictments. It also provided new insights into the extent of his cooperation.

Boesky’s lawyers did not suggest how much the sentence should be reduced. They also asked Lasker not to consider the request until about October, because by then “the extraordinary extent and value of Mr. Boesky’s cooperation will become even more evident than it was at sentencing, or than it can be now.”

It said Lasker should reconsider the punishment “imposed in light of developments since sentencing, the vital public interest in rewarding cooperation, and the dictates of justice and mercy.”

John Carroll, an assistant U.S. attorney handling the Boesky case, would not comment on the request or other aspects of the document. But he said the government intended to file a written response with Lasker by Friday.

Once Wall Street’s best-known speculator in stocks of companies targeted for possible takeovers, Boesky stunned the financial world in November, 1986, when he paid the Securities and Exchange Commission a record $100 million to settle charges of insider trading, the misuse of secret information to profit in securities deals.

He was banished from the securities business for life.

Boesky has since cooperated in a massive federal probe into possible financial wrongdoing by others that has resulted in four criminal charges in the United States, seven in Britain, four guilty pleas and nine civil actions by the SEC.

In return for his cooperation, Boesky was allowed to plead guilty to a single count of conspiracy to lie to the SEC. He was sentenced to three years in federal prison by Lasker on Dec. 18 and began serving it March 23.

“Ivan Boesky’s unprecedented cooperation with the government did not end upon sentencing,” the document filed by his lawyers said.

Five days later Boesky was back in debriefing sessions with federal prosecutors, it said, and “has attended more than a dozen other meetings since that date, with at least six different assistant United States attorneys, three different special agents of the IRS, and 10 investigators from the SEC.”

It said the sessions covered “new topics, new transactions, new relationships, and new securities growing out of Mr. Boesky’s earlier cooperation and other governmental investigations.”

In addition, Boesky helped investigators in seizing and examining more than 700 file boxes of documents from his former offices, and “assisted the government in its analysis and understanding of hundreds of documents critical to its criminal and civil investigations.”

His lawyers said Boesky undertook this cooperation despite a death threat from former friend and fellow speculator John Mulheren, who was arrested Feb. 18 with a loaded assault rifle, two pistols and a shotgun. Federal prosecutors have since said that Boesky implicated Mulheren in illegal conduct.

In a previously undisclosed detail, his lawyers said federal officials “took a number of public and private steps to protect Mr. Boesky’s safety.”

They also said Mulheren’s death threat came “at a time when other subjects of the United States Attorney’s Boesky-related investigations had Mr. Boesky under physical surveillance.”

They said these people, who weren’t identified, hired agents who “watched Mr. Boesky’s movements from telephone-equipped cars, followed him on the streets, questioned other patrons at establishments he utilized and harassed him in various other ways.”