Boesky to Hold Off on Applying for Parole

Ivan F. Boesky, the imprisoned speculator at the center of Wall Street’s insider trading scandal, will not apply for parole from his three-year term at a California prison when he becomes eligible next month, his lawyer said Friday.

Sources close to the case, who spoke on condition that they not be identified, said lawyers are waiting to see whether high-yield bond financier Michael Milken of Drexel Burnham Lambert Inc. is indicted in a case based on information supplied by Boesky before seeking early release.

Milken is expected to be charged as a result of Drexel’s plea deal, in which the securities firm agreed to plead guilty to six felony counts in addition to the financial settlement.

Boesky is eligible for parole from the minimum-security prison camp in Lompoc, Calif., on March 21, according to the U.S. Bureau of Prisons. He went to prison last March 23.

But Washington attorney Robert McCaw said Boesky has not applied for parole and does not plan to in the near future.

“He will seek a parole hearing at the point where his advisers think it is most likely he would get some kind of favorable consideration,” McCaw said. “There has been no parole hearing date scheduled. There is nothing imminent.”

The attorneys believe an indictment of Milken would be further evidence of the value of Boesky’s information in weeding out Wall Street corruption.

Not on the Docket

McCaw said there was “no chance” Boesky would be released by March on parole and “relatively little chance” he would be freed on a judge’s order.

Parole hearings at the 689-inmate prison, known as “Club Fed” because of facilities including tennis and boccie ball courts, are held every other month and Boesky is not on the March docket, Lompoc unit manager Jim Finley said.

Under federal sentencing guidelines, Boesky’s earliest possible non-parole release date based on good behavior is April 4, 1990.

Boesky, once Wall Street’s best-known speculator in the stocks of potential takeover targets, now works on a prison cleanup crew, McCaw said.

He is likely to be released early only if Manhattan federal judge Morris E. Lasker, who sentenced Boesky, rewards his cooperation with prosecutors.

Last April, Boesky’s lawyers asked Lasker to reduce his sentence on grounds that information Boesky gave the government unearthed other fraud cases, including the mammoth investigation of Drexel that resulted in a record $650-million plea-bargain settlement in December.