Judge Sees Milken Jailed for 3 Years : Punishment: The sentence was 10 years, but Kimba Wood indicates that she is likely to recommend parole after about 36 months.

The federal judge who sentenced former junk bond chief Michael Milken to 10 years in prison said Tuesday that she had intended for him to actually serve only about one-third of that time.

U.S. District Judge Kimba M. Wood made the statement in a brief court hearing in New York in which she discussed the recommendation that she will make to the U.S. Parole Commission on when Milken should become eligible for parole. The recommendation isn’t binding.

Milken, the former head of Drexel Burnham Lambert’s junk bond department, is appealing his sentence, but he is expected to begin serving time anyway on March 4. The judge on Tuesday said she “believed that a period of 36 to 40 months incarceration fit the crimes and the offender.”

When she imposed the sentence in November, it was viewed as an extremely harsh one, far exceeding the prison time imposed in any of the other big securities fraud cases of the late 1980s. Lawyers involved in the case had said Milken might be required to serve about two-thirds of the sentence, or roughly six years.

But the judge’s statement Tuesday indicates that she intended for Milken to serve only about a year longer in prison than the 24 months actually served by admitted inside trader Ivan F. Boesky. Boesky had cooperated fully with prosecutors and turned in many prominent Wall Street figures, including Milken. As a result, he was given a lenient three-year sentence, and paroled after two, despite what prosecutors and a federal judge viewed as the severity of Boesky’s crimes.

A Milken spokesman declined to comment Tuesday.

The judge also disclosed that a federal probation officer had calculated that the amount of money Milken had cost victims, through the six felonies he pleaded guilty to, came to only $685,614. Wood said she agreed that, based on the evidence provided, the amount totaled less than $1 million.

The calculation of whether he cost victims more or less than $1 million is important, because if it was over that amount, parole commission guidelines normally would require Milken to serve more than a third of his sentence.

Wood said, for example, that there wasn’t any evidence that Milken’s illegal actions involving MCA Inc. stock in 1984 resulted in a loss to MCA shareholders. Milken had pleaded guilty to helping Golden Nugget secretly dispose of a big block of MCA stock by arranging a sham purchase by Boesky.

The judge also left open the possibility that she will eventually reduce the 10-year sentence if prosecutors certify that Milken has cooperated with them. Under an unusual arrangement, Milken had agreed that he would cooperate fully with the government after he was sentenced. Milken is known to have had extensive meetings with prosecutors, beginning in December. But it isn’t clear yet whether prosecutors believe he has given them information that could be used to make additional cases.