Baby, You're a Rich Man Still

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Even so, he may be due for a colossal tax break. Since $400 million of his penalty will be set aside for compensation of investors who suffered from Milken's schemes, the money can be treated as a tax-deductible business expense. Milken could thus be eligible for up to $112 million in tax write- offs. "This is what happens when you have corporate criminals whose penalty is basically monetary," declares Michael Waldman, a tax specialist for Public Citizen, a Washington-based consumer group. "They hire the best lawyers and tax advisers money can buy to figure out ways to deprive society of its debt, in years and dollars."

Legal fees are probably Milken's biggest regular expense right now. For a tycoon, he lives a relatively modest life with his wife Lori and three children in a five-bedroom house in the Los Angeles suburb of Encino. When Milken was the most powerful financier in America, a bodyguard drove him to his office by 4:30 a.m. in a limousine. But those days are behind him. Under terms of the settlement, the Government has permanently barred Milken from the securities business. Yet if Milken ever does run a little low, he could always call on his brother Lowell, who earned more than $102 million at Drexel from 1984 through 1987. As part of the plea agreement, all charges against Milken's sibling were dropped.

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