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Government Files Sentencing Report Under Seal

September 13, 1990

NEW YORK (AP) _ Prosecutors filed a sentencing report Thursday about financier Michael Milken that is believed to allege numerous uncharged crimes, but it was not made public pending challenges from the news media.

An attorney for Milken said he would oppose release of the papers before the former Drexel Burnham Lambert Inc. junk bond executive is sentenced on Oct. 1 for his guilty plea to six securities and tax fraud counts.

The sentencing memorandum reportedly contains details about Milken’s alleged conduct unearthed by the government but never made public because of the plea agreement reached in April.

U.S. District Judge Kimba Wood gave attorneys for members of the media until Monday to argue why the document should be released before Milken is sentenced.

Under the plea deal, Milken’s lawyers agreed not to contest the release of the sentencing memo or the inclusion of conduct outside the plea. They can, however, seek to block release prior to the date of sentencing.

Assistant U.S. Attorney John K. Carroll said the government did not object to releasing a version of the report before sentencing but would delete references to unindicted co-conspirators and confidential information related to an ongoing grand jury investigation.

The government normally does not release such memos, which contain arguments for or against the severity of a sentence, until the day of sentencing. Defense lawyers also can file a sentencing report.

Milken’s lawyers are expected to oppose early release of the report on the grounds that prejudicial publicity about Milken could threaten his right to a fair sentencing. High public interest generated by the case is one argument for early release.

″We want this case treated in terms of sentencing the way other defendants are treated in this court and not different,″ Milken attorney Martin Flumenbaum said at a hearing.

″There have always been high visibility cases in this court and the practice (of withholding reports until sentencing) has been invariably followed,″ he said. ″We bargained for it to be publicly disclosed at the date of sentencing.″

Richard Tofel, an attorney for Dow Jones & Co., which owns The Wall Street Journal, said he would file a motion arguing in favor of early release. Flumenbaum was given until Wednesday to respond.

Prosecutors said a version of the sentencing report deleting the sensitive information could be prepared within 48 hours of a judge’s release order. Tofel said the newspaper would seek to have the full report released publicly, either before or at sentencing.

Earlier this year, U.S. District Judge Pierre Leval refused to admit a sentencing report alleging that former Wall Street arbitrager Robert Freeman committed 20 crimes in addition to a single insider trading count he admitted.

That is not an issue in this case because Milken’s lawyers agreed that the government could raise at sentencing conduct not included in the plea deal.

Milken faces up to 28 years in prison. He originally was indicted in March 1989 on 98 counts of fraud and racketeering in the biggest securities fraud case in history.

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