Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, April 21, 1990 TAG: 9004210156
SECTION: BUSINESS PAGE: A5 EDITION: METRO
SOURCE: Associated Press
DATELINE: NEW YORK LENGTH: Medium
Milken is expected to plead guilty to six felony counts and pay fines and restitution totaling $600 million under the agreement reached late Friday, said the sources, who asked not to be named.
The former head of Drexel Burnham Lambert Inc.'s high yield bond department is expected to enter a guilty plea in U.S. District Court in Manhattan next week, the sources said.
The individuals cautioned that while a settlement had been reached it would not be final until a plea formally is entered.
Milken, 43, is widely acknowledged as one of the most important financial figures of the 1980s. Through Drexel, he raised billions of dollars by issuing junk bonds that allowed hundreds of companies to grow and also fed a wave of hostile takeovers.
He and two others were indicted last year on 98 counts of fraud and racketeering related to insider trading and other securities violations in a series of takeover deals from 1985 to 1987.
None of the counts in the plea bargain, reached after marathon negotiations between the two sides, relates to insider trading and there is no racketeering charge.
As part of the deal, the government agreed to drop all charges against Milken's brother, Lowell, who was named in the original indictment, the sources said.
It was unclear whether the government would recommend a specific sentence to U.S. District Judge Kimba Wood. Milken would face a maximum of up to 30 years in prison and fines of $1.25 million on the six felony counts.
A single racketeering count would have carried a 20-year sentence.
Assistant U.S. Attorney John Carroll declined to comment on the deal. A spokesman for Milken also declined to comment.
The plea deal would bring to an apparent close the largest government investigation of Wall Street crime ever. The probe made Milken and Drexel its main targets following the November 1986 guilty plea by stock speculator Ivan Boesky, who implicated Milken and the firm
But the government could recommend, as some reports have indicated it will, that Milken serve the counts concurrently, for a maximum term of five years in prison.
The plea deal also would settle separate civil charges brought by the Securities and Exchange Commission in 1988. The sources said the $600 million in fines would be split between criminal fines and a fund for payment of any civil lawsuits related to Milken's activities.
by CNB