A federal judge Wednesday sentenced Lisa Jones, a former trading assistant in Drexel Burnham Lambert's junk bond department in Beverly Hills, to 18 months incarceration and $50,000 in fines on the perjury and obstruction of justice counts that she was convicted of earlier this year.
U.S. District Judge Leonard B. Sand said he took into account Jones' severe emotional problems and unhappy personal history. But he said the severity of Jones' crimes required a period of forced confinement in a minimum-security prison camp and a halfway house. He also sentenced her to 2 1/2 years of probation.
"The crimes for which Miss Jones has been convicted are very serious crimes," the judge said. Sand said perjury and obstruction of justice "pose grave dangers to law enforcement," and he noted that Jones had lied repeatedly to a grand jury, even after she had been warned that she would probably be prosecuted for perjury.
Jones, 26, was convicted in March of lying to a grand jury investigating former Drexel junk bond chief Michael Milken and a small securities firm, Princeton/Newport Limited Partners. Jones had worked as an assistant to former Drexel trader Bruce L. Newberg, who was convicted July 31 of racketeering and securities fraud charges in the Princeton/Newport trial. Newberg is also a defendant in the pending criminal case against Milken.
The judge recommended that the federal Bureau of Prisons allow Jones to serve the first year of her sentence at a minimum-security prison camp for women in Phoenix. He said she would be able to receive psychiatric counseling there. He also said he will recommend that she serve the rest of her sentence at a facility in Los Angeles known as Sun West, which would allow her to leave during the day to hold a job.
To Decide Sept. 13
Jones was in tears several times during the sentencing hearing. When the judge asked her if she had anything to say before he imposed the sentence, she said in a barely audible voice: "No, your honor."
Her current lawyer, Daniel H. Bookin of San Francisco, said an appeal of her conviction will be filed soon. He said one of the grounds for the appeal will be that she didn't receive adequate legal counsel when she testified before the grand jury. She was represented by one of Drexel's lawyers then. Bookin claims that was a conflict of interest since Drexel at the time was a target of the investigation.
The judge said he will decide on Sept. 13 whether to allow her to remain free on bail pending the appeal.
According to testimony, Jones had been forced to support herself since she was 14, when conditions at home led her to run away. She obtained a job as a teller at the Bank of America by lying about her age, eventually earned a high school equivalency degree and got a clerical job at Drexel. By 1988, she had worked her way up to a job as a trading assistant and earned $117,000 a year.
In asking for a lenient sentence, Bookin said the Drexel junk bond department and Newberg, in a sense, had come to represent the family she had never had. Bookin cited a report submitted to the court by Los Angeles psychiatrist Sol Faerstein, who he said had found that psychologically it was virtually impossible for Jones to testify against Newberg and her other co-workers.
"The painfulness of Lisa Jones' childhood was exceeded only by its brevity," Bookin told the judge. He said that "at Drexel, for the first time in her life, she felt like a worthwhile person," and in Newberg had finally found an authority figure she could look up to. Bookin said Faerstein found that Jones has significant emotional problems and would be harmed by prison. He asked that she be allowed to remain free so that she could continue receiving psychotherapy with a psychologist in Los Angeles.
But the judge said the sentence would allow her to continue receiving adequate psychological counseling. And he said no evidence had been presented that she wasn't aware that she was breaking the law when she lied to the grand jury. He said it was a "deliberate decision which she made to lie, to lie on three separate occasions to the grand jury, and to persist in a pattern of lying."
To Pay Prison Costs
Judge Sand said the sentence was in line with federal sentencing guidelines, although in court Bookin asserted that the judge had miscalculated and that under the guidelines she is eligible for a sentence of only 10 months. The $50,000 penalty included a $25,000 fine, plus the cost of her imprisonment, calculated to be $14,521 per year, plus the cost of her supervised probation, $8,100 per year. The new guidelines allow judges to charge defendants for the cost of their imprisonment and probation.
Jones had faced a maximum sentence of 35 years in prison and a fine of $1.7 million.