Fourth Drexel Worker Makes Deal With U.S.
Lawyers for Drexel Burnham Lambert Inc. were continuing to negotiate a settlement with federal prosecutors following word that yet another employee had agreed to testify against the firm.
Terren S. Peizer, 29, a trader in Drexel’s “junk bond” department in Beverly Hills, was granted immunity from prosecution in exchange for his agreement to cooperate, according to his lawyer, Plato Cacheris. Peizer had worked closely with the head of the department, Michael Milken, who is one of the main targets of the investigation.
Cacheris said Peizer received a subpoena about a month ago from the office of U.S. Atty. Rudolph W. Giuliani in Manhattan. The agreement to testify was worked out in a meeting with prosecutors on Wednesday, he said.
The lawyer refused to elaborate, however, on what information Giuliani’s office was seeking from Peizer.
Witness List Grows
Peizer became the fourth Drexel employee known to be cooperating with prosecutors. An even bigger blow to the firm came earlier in the week, when Cary J. Maultasch, a Drexel stock trader in New York, agreed to cooperate in exchange for a promise that if he is prosecuted it will be only for a single felony count.
Maultasch is believed to have direct knowledge of some of the firm’s dealings with former stock speculator Ivan F. Boesky. The transactions are expected to form the main part of the government’s case against Drexel, Milken and several other employees.
As reported, the other Drexel employees cooperating include Charles Thurnher, an accountant and administrator in Drexel’s Beverly Hills office, and James Dahl, one of the top bond salesmen under Milken. Dahl’s attorneys have said he was forced to testify against his wishes by a court order obtained by prosecutors.
The growing slate of cooperating witnesses is believed to have greatly strengthened Giuliani’s hand and increased the pressure on Drexel to settle.
Despite rumors Thursday that talks had broken down, sources said lawyers for the firm were continuing to negotiate with Giuliani’s office and that a settlement might be reached early next week.
The firm probably would have to plead guilty to at least two felony counts, pay a penalty of at least $200 million and agree to changes in management, possibly including severing all links with Milken.
A Drexel spokesman declined to comment on the negotiations or the decision by Peizer to aid the prosecutors. The U.S. Attorney’s Office also has declined to comment on the developments.
