Milken to Get Work Privileges : Securities: The former junk bond promoter will be moved to an L.A.-area halfway house on Jan. 4 after serving nearly two years in prison for fraud.

Former junk bond promoter Michael Milken will begin a two-month transition to freedom on Jan. 4 when he is scheduled to be moved to a halfway house in the Los Angeles area, a federal prison official confirmed Thursday.

Milken has served nearly 22 months of a two-year prison sentence for securities fraud. (An initial 10-year sentence was later reduced.) He is scheduled for release March 2, when he begins the next phase of his sentence: 1,800 hours of community service over three years.

Janice Killian, executive assistant to the warden at the Pleasanton, Calif., minimum security facility where Milken has served his term, did not specify to which halfway house the former Drexel Burnham Lambert executive will be transferred, but he said it is in Southern California.

Milken will be required to be in the halfway house daily, 6 p.m. to 6 a.m., but can leave during the day for a job.

Killian would not comment on what type of job Milken is likely to hold. He has been banned by the Securities and Exchange Commission from working in the securities industry.

But Lorraine Spurge, formerly one of Milken’s closest aides at Drexel’s junk bond headquarters in Beverly Hills, said there are many executives waiting for his release so that they can solicit financial advice from him.

“I think a lot of business people here will be glad to have him back,” said Spurge, now head of the Knowledge Exchange, a consulting firm. “There are a lot of people who would like to talk to him and get his feedback on transactions.”

She suggested that Milken’s release from prison may also be a boon to Los Angeles, although she declined to comment specifically on what his plans are. “I think Michael has a lot to offer, and the City of Los Angeles can sure use some help,” she said.

Milken was eligible to move to a halfway house in September, but prison officials delayed the move longer than normal for federal inmates without disclosing reasons.

After a massive government investigation, Milken pleaded guilty in 1990 to six counts of securities law violations. He also paid $1.1 billion in fines and settlements of civil claims relating to his activities at Drexel.

Milken had a huge income at the securities firm. In 1987 alone, he earned more than $550 million. He and his family are still estimated to have a net worth of several hundred million dollars.