NEW YORK -- Michael Milken may yet have the opportunity to face his chief accuser, Ivan F. Boesky, in court. A federal judge delayed Milken's sentencing yesterday and ordered an extraordinary hearing to consider additional "unadmitted crimes" allegedly committed by the "junk" bond king.
In granting prosecutors' request for this unusual hearing, U.S. District Judge Kimba Wood surprised many in the courtroom. Milken, 44, was scheduled to be sentenced Monday on six felonies, including conspiracy and securities fraud. He faces a maximum 28 years in prison.
"You are talking about something that is going to prolong the extraordinary anguish of my client and his family," said Milken's lawyer, Arthur Liman.
"I recognize the delay in sentencing is very painful," replied Judge Wood.
But she said she will hold the hearing "not to establish whether [Milken] is guilty of every unadmitted crime. Rather, the purpose is to give the court a sense of the defendant's character."
Prosecutors have consistently argued that the six felonies to which Milken pleaded guilty in April, settling an original 98-count indictment, were only a fraction of a long-standing pattern of criminal activity by Milken and the Drexel Burnham Lambert "junk" bond department he controlled.
The defense has argued that the crimes Milken has admitted were isolated instances of aberrational behavior.
The judge said she hoped to limit the hearing to two weeks, with 20 hours of testimony for each side. The judge recommended that each side limit itself to providing testimonyon two to five individual transactions.
If the hearing is held, it is almost certain that Boesky, the government's chief witness against Milken, will be called to testify.
The judge said she would "prefer not to hold this hearing," and there is still a chance the two sides could reach a compromise on the length of Milken's sentence that would make the hearing unnecessary.
The judge scheduled a conference Tuesday to discuss scheduling for the hearing, which she hopes could begin later next week.
Jack Coffee, Columbia University Law School professor, applauded Judge Wood. "She has done the right thing," he said. "This is good for the country. There has been a great cloud over this case. The government alleged everything, threw in everything but the kitchen sink and then it ended more with a whimper than a bang."
Now, at least some of the evidence and defense could be placed on the record, he said.
Contrary to the impression that may have been left by the prosecutors' sentencing memo that Milken's charitable contributions and work with disadvantaged children had been undertaken to spruce up his image, Judge Wood said yesterday that she had directed the probation department to investigate and had concluded that Milken's service activities began "well in advance" of these proceedings.
Judge Wood also said yesterday that she had "no intention of lengthening" Milken's sentence "as an inducement to cooperation." As a part of the agreement reached in April, Milken agreed to assist the government in continuing investigations once he was sentenced.
"I am assuming Mr. Milken will do what he says he will do," she said.
She also said she rejected the government's argument that Milken's agreement to pay $600 million in fines and restitution is "tantamount to proof" he is guilty of more than he has admitted.