NEW YORK, SEPT. 27 -- The federal judge who is to sentence convicted junk bond financier Michael Milken dealt him a setback today by declaring that she will take into account prosecutors' allegations that he committed many crimes in addition to the six that he admitted to in his landmark plea bargain in April.
In a court session here, U.S. District Judge Kimba M. Wood also ordered two weeks of hearings to help her judge both the government's case for a stiff sentence and Milken's pleas for leniency.
The hearings will delay Milken's sentencing, which had been scheduled for Monday. Although he could receive up to 28 years in prison for the six counts of securities fraud and other crimes that he has admitted, legal experts have estimated that he is likely to receive between three and 10 years.
The hearings will mark the first time in the four-year-old inquiry into Milken's activities that witnesses will testify publicly about the former Drexel Burnham Lambert Inc. executive who revolutionized U.S. finance by promoting the risky, high-interest-paying securities called junk bonds.
The prosecution has described Milken as the biggest white-collar offender of the 1980s and most likely would use the hearings to present their case that he had engaged in a pattern of criminal behavior that was central to his junk bond operations. In contrast, the defense would use the hearings to bolster its position that Milken was a generally honest businessman and generous philanthropist who broke the law in a few isolated instances on behalf of clients.
In a related development, Wood dashed prosecutors' hopes that she would give Milken a long jail term to encourage him to testify against other Wall Street wrongdoers. But she assured prosecutors that at some point down the road she would be willing to reduce whatever sentence she decides to give Milken if prosecutors later wish to reward him for helping them catch other white-collar criminals.
Wood said the hearings would have the purpose of giving her "a sense of the defendant's character." Although she expressed a strong hope that the prosecution and the defense would agree on some way to make such hearings unnecessary, the two sides failed to do so in a brief attempt during a recess today. They plan to make another attempt to reach some agreement by Tuesday.
Wood rejected the request by Milken's lawyers that, in fixing his sentence, she ignore the prosecution's assertions that Milken committed many crimes that he has not admitted. She said it was "perfectly proper and traditionally quite common" for a judge to take into account the government's evidence that a convict had committed crimes that he had not acknowledged.