Judge Asks Lawyers to Total Fraud Losses in Milken Case
A federal judge Wednesday asked lawyers for the government and Michael Milken to calculate the total amount of fraud in Milken’s crimes to help authorities determine how much prison time he must serve.
Federal parole officials need an estimate to recommend when Milken will be eligible for parole, and the number could affect the length of incarceration by more than two years.
U.S. District Judge Kimba M. Wood last week sentenced the former Drexel Burnham Lambert Inc. financier to 10 years in prison for six felony counts related to illegal securities trading.
At a hearing in Manhattan federal court Wednesday, Wood said that because of the nature of Milken’s crimes it was not easy to calculate losses to victims. She said the parole commission “never had anything like this in mind.”
While the parole commission makes its own calculation on such losses, Wood said she wants to present officials with a number agreeable to both sides.
Under parole guidelines, a first offender such as Milken would face a minimum prison term of 24 months to 36 months if victims’ losses ranged from $200,000 to $1 million. If the fraud exceeds $1 million, Milken’s recommended prison term before parole would equal 40 months to 52 months. But the parole commission is not bound by the guidelines.
Milken attorney Arthur L. Liman said at the hearing that he believed the amount would not exceed $1 million. Wood scheduled a Dec. 6 hearing on the matter.
As part of his plea deal, Milken agreed to pay $200 million in criminal fines and penalties and place $400 million into a fund to compensate investors hurt by his crimes. But that figure does not constitute an estimate of losses.
Milken’s lawyers have 10 days from the date the sentence judgment was entered formally in U.S. District Court to appeal the 10-year term. Court officials said the sentence judgment was to occur Wednesday, after Wood allocated $1.5 million as a criminal fine and the remainder of the $200 million as a penalty, completing details of the sentencing.
Liman declined to comment on a published report Wednesday that he planned to appeal the sentence.
