Lawyers Plan to Ask Judge to Cut Boesky’s Sentence
Attorneys for Ivan F. Boesky plan to ask a federal judge to reduce his three-year jail term on grounds that the convicted inside trader’s cooperation led to the indictment of “junk bond” financier Michael Milken, sources said Thursday.
Boesky became eligible for parole last month after one year in a minimum security prison but probably will seek early release from the judge in Manhattan who sentenced him, not from prison officials, said an attorney involved in the case.
Attorneys will have to prove that Boesky should be rewarded for providing information that led the government to Milken, the former Drexel Burnham Lambert Inc. financier charged last week with 98 counts of racketeering and securities fraud.
Boesky’s lawyers decided to wait to seek his release until after the Milken indictment because they felt the judge and the prison would not otherwise be sympathetic to freeing the man widely considered the embodiment of Wall Street corruption in the mid-1980s.
“A very big piece of his contribution which could not be revealed now has been revealed,” said the attorney, who asked not to be identified. “That’s the principal reason for the earlier delay.”
Boesky was eligible for parole March 21, two days before his one-year anniversary inside the Lompoc, Calif., prison camp where the one-time stock speculator is working on a cleanup crew.
In a plea for leniency, Boesky’s attorneys in April, 1988, filed a request for U.S. District Judge Morris Lasker to reduce the sentence on grounds that information Boesky gave prosecutors unearthed other fraud cases, including the charges against Milken and charges that led to a separate $650-million criminal plea deal with Drexel.
“As these pending investigations mature into criminal and civil charges, the extraordinary extent and value of Mr. Boesky’s cooperation will become even more evident than it was at sentencing,” the attorneys wrote at the time.
They asked Lasker to wait until last October to hear the motion, then requested another delay.
“It’s likely that will be reactivated soon,” the attorney said, but did not specify when the request would be made.
Assistant U.S. Atty. Bruce Baird, who heads the securities fraud division of the Manhattan U.S. Attorney’s Office, declined to comment on Boesky.
Boesky, 52, paid $100 million in December, 1986, to settle charges by the Securities and Exchange Commission that he illegally used inside information to profit from securities deals.
He then cooperated in the government’s wide-ranging probe of white-collar Wall Street crime, supplying information used toward civil or criminal charges in more than a dozen cases in the United States and Britain.
In exchange, Boesky was allowed to plead guilty to one count of conspiracy to lie to the SEC. Lasker in December, 1987, sentenced him to three years in jail. His earliest possible non-parole release date based on good behavior is April 4, 1990.
The next parole hearing at the 689-inmate Lompoc facility--known as “Club Fed” because of recreational facilities including tennis and boccie ball courts--is set for May, prison spokesman Gavin O’Connor said.
