Martha Stewart
goes to slammer

By WND Staff


Martha Stewart (Marthatalks.com)

U.S. District Judge Miriam Goldman Cedarbaum sentenced homemaking maven Martha Stewart, 62, to five months in prison, five months under house arrest and two years’ probation today for lying about a stock sale.

She also was fined $30,000.

The sentence has been stayed pending appeal.

“Today is a shameful day. It’s shameful for me and my family and for my beloved company and for all of its employees and partners,” Stewart told reporters after sentencing.

“I have been choked and almost suffocated” during this process, she said.

“I’m not afraid. I’m not afraid whatsoever,” Stewart added. “I’m just sorry it’s come to this, that a small personal matter could be blown out of proportion and with such venom, such gore.”

Smiling, she urged consumers to continue to support her products, vowing, “I’ll be back.”

Former Merrill Lynch & Co. stockbroker Peter Bacanovic, 42, who was convicted along with Stewart of lying about the 2001 stock sale, was sentenced later to five months in prison and five months under house arrest.

Stewart arrived at federal court in Manhattan dressed in a black pantsuit. She showed no emotion as supporters applauded and shouted encouragement.

After announcement of the sentence, which could have been up to 16 months in prison, Martha Stewart Living Omnimedia Inc. shares soared by more than a third.

On Dec. 27, 2001, Stewart, in a brief phone call from a Texas tarmac on her way to a Mexican vacation, sold 3,928 shares of ImClone Systems Inc., a company run by her longtime friend Sam Waksal.

Prosecutors alleged that Bacanovic ordered his assistant to tip Stewart that Waksal was trying to sell his shares. ImClone announced negative news the next day that sent the stock plunging and saved Stewart $51,000.

Stewart and Bacanovic said she sold because of a preset plan to unload the stock when it fell to $60. ImClone now trades around $80.

The star witness against Stewart was Douglas Faneuil, a young former brokerage assistant who vividly described Bacanovic’s order when he learned Waksal was trying to sell: “Oh my God. Get Martha on the phone.”

Ann Armstrong, a veteran Stewart assistant, also testified Stewart had altered a computer log of a message Bacanovic left earlier that day about ImClone.

Following the March 5 verdict, lawyers for both defendants accused one juror of lying about an arrest record to get on the trial. Cedarbaum denied a new-trial request, saying there was no proof the juror lied, or was biased.

In May, federal prosecutors accused Larry F. Stewart, a Secret Service ink expert, of lying repeatedly in his testimony at the trial about the role he played in ink-analysis testing of a stock worksheet.

Just last week, Cedarbaum again denied new trials for Stewart and Bacanovic, this time saying there was “overwhelming independent evidence” to support the guilty verdicts.

Stewart resigned as CEO of Martha Stewart Living Omnimedia Inc., once a $1 billion media empire, when she was indicted in 2003.

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