A Stiff Term for the Wizard

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Wood drove home that point in rendering her decision. While she acknowledged that sentencing Milken to community service would permit him "to work productively with others," she asserted that "a prison term is required for the purposes of general deterrence." Moreover, she added, Milken had committed "serious crimes warranting serious punishment and the discomfort and opprobrium of being removed from society."

Milken has the right to appeal on grounds that the presentencing hearing violated his rights by introducing charges that had already been dropped. But legal experts saw little hope for that strategy. "There is no right to appeal on the length of a sentence," says Columbia law professor John Coffee Jr. "They may try to challenge the constitutionality of the hearing, but I'm certain they will be unsuccessful."

Even as Milken heard his sentence, the firm he had built into a financial powerhouse was under legal siege once again. Federal regulators earlier this month filed a $6.8 billion claim against the bankrupt Drexel for allegedly rigging the junk-bond market and selling bonds to savings and loans before the value of the IOUs collapsed. The government expects to lose at least $2 billion on junk bonds that it has taken over from seized thrifts. Drexel said it would strongly contest the government claim.

When he emerges from prison, Milken will remain an extravagantly wealthy man. At the height of his power, from 1983 to 1987, Drexel paid him $1.1 billion for pioneering junk bonds and turning them into Wall Street's most lucrative money machine. Instead of squandering the fortune on yachts and jets, Milken formed investment partnerships that earned him additional millions. But riches will not shield Milken from the loss of his freedom. In an 11-page plea for leniency that he wrote to Wood last month, Milken acknowledged, "All people, I am sure, have a fear of incarceration and separation. I am not unique, and I, too, have those fears."

It is precisely such fears that Judge Wood intends to reinforce with her stiff sentencing of Milken, say experts. "We are dealing here with a theme that resonates very strongly in American society," says Columbia's Coffee. "It is that the abuse of responsibility by those in high places will be dealt with harshly." The government hopes to make the threat of harsh sentences for white-collar felons the pointed lesson of Michael Milken's fall.