L S Milken Foundation

The state Attorney General's Office launched an audit Thursday of the charitable foundations established by embattled Beverly Hills "junk bond" genius Michael Milken, citing concerns that the tax-exempt groups' directors may have benefited personally from the foundations' activities.

The state Attorney General's Office launched an audit Thursday of the charitable foundations established by embattled Beverly Hills "junk bond" genius Michael Milken, citing concerns that the tax-exempt groups' directors may have benefited personally from the foundations' activities.

The charitable trusts controlled by former junk-bond impresario Michael Milken, which he and his wife endowed with $250 million in 1987-88 alone, virtually stopped growing after Milken was indicted in early 1989 on federal securities charges that led to his guilty plea and current prison term. Donations to outside causes by his family's four main trusts also slowed, state records show. Milken did form a fifth foundation in 1989, although no financial information about it is yet available.

Beverly Hills financier Michael Milken and his wife donated a staggering $196.4 million to their three charitable foundations last year, lifting the foundations' combined assets to $280.9 million and making them among the nation's 50 biggest charitable groups, new state records show. Milken, who has become a near-billionaire by pioneering the use of high-yield, high-risk debt known as "junk bonds," recently was charged with civil securities fraud and illegal inside trading.