Milken got in trouble for selling high yield bonds too profitably. I wish I was joking, but that is literally what happened. He sold bonds to buyers who were not forced to buy them and who freely agreed to pay the selling price.
Kozlowski stole money from the company of which he was CEO.
What Milken's shrewd trading and Kozlowski's theft have to to do with subprime mortgages, I have no idea.
I’m pretty sure Milken got done for tax evasion (both his own and helping others in theirs).