In the Case of Michael Milken

The letters are pouring into a Manhattan court beseeching U.S. District Court Judge Kimba M. Wood to be merciful in next month’s sentencing of junk bond king Michael Milken. The former Drexel Burnham Lambert executive faces jail time for his part in one of the largest securities scandals ever to hit Wall Street.

Over the years Milken has given generously of his time and money to various charities, communities and causes. He’s certainly no Gordon Gekko, the selfish investment banker of the movie “Wall Street.” But let us also keep in mind that Milken pleaded guilty to these crimes:

Crime One: Conspiracy . Conspiring with others, including former stock speculator Ivan F. Boesky, to conduct illegal stock trades, to keep secret records from Drexel’s books, to evade taxes and to violate other securities laws.

Crime Two: Aiding and abetting the filing of false documents with the Securities and Exchange Commission. Milken admitted to failing to record a deal compensating Boesky for trading losses in the stock of a construction company that was the target of a takeover. Milken recommended the stock purchase and had Drexel pay Boesky several millions of dollars for trading losses.

Crime Three: Securities fraud. Milken admitted arranging Boesky’s secret purchase of MCA Inc. stock held by Drexel client Golden Nugget Inc. in 1984. Milken got Boesky to buy 875,000 shares of MCA to hide from the market that Golden Nugget was dumping its position--and to hold up MCA’s stock price.

Crime Four: Aiding and abetting the violation of SEC reporting requirements for brokers-dealers. In 1985, Drexel acquired more than $20 million worth of stock from Boesky and agreed to hold it for him. This allowed Boesky to cheat on his taxes. By failing to report the stock sales, Milken helped Boesky violate federal laws.

Crime Five: Mail fraud. The government said Milken adjusted share transaction prices to provide cash that could be funneled back to Drexel through junk bond purchases.

Crime Six: Aiding and abetting the filing of a false tax return. Milken admitted setting up prearranged trades to allow a client to claim unlawful short-term capital losses to reduce his tax liability.