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US lifestyle diva sentenced to 5 months in prison
(Agencies)
Updated: 2004-07-17 10:21 Choking back tears and pleading for leniency,
Martha Stewart was sentenced to five months in prison Friday for lying about a
stock sale. But the woman who saw her gracious homemaking empire crippled over a
single transaction smiled boldly into the cameras outside to denounce her
treatment, pitch her company and vow: "I'll be back."
Stewart, who was also ordered to spend five months confined to her home and
fined $30,000, was allowed to remain free pending appeal. The sentence was the
minimum possible under federal guidelines.
US lifestyle diva Martha
Stewart appears outside Manhattan federal court after her sentencing
Friday July 16, 2004. Stewart was sentenced to five months in prison
Friday for lying about a stock sale.
[AP]
| Peter Bacanovic, the high-powered
stockbroker who was convicted along with Stewart of lying about her stock sale
in December 2001, received the same sentence of five months in prison and five
months home confinement.
While she did not admit guilt in court — a move that could have jeopardized
her appeal — Stewart took pains to tell U.S. District Judge Miriam Goldman
Cedarbaum she was sorry that others had been hurt by the scandal. (Timeline of events in Stewart
scandal )
"What was a small personal matter became over the last two and a half years
an almost fatal circus event of unprecedented proportions spreading like oil
over a vast landscape, even around the world," Stewart said.
Cedarbaum accepted a defense request to recommend to federal prison officials
that Stewart serve her time at a minimum-security facility in Danbury, Conn.,
close to her home in Westport.
"I believe that you have suffered, and will continue to suffer, enough," the
judge said.
But Cedarbaum, citing nationwide confusion over a recent Supreme Court ruling
on sentencings, allowed Stewart to postpone the sentence while her lawyers
appeal her conviction — a process that could take months, and that legal experts
have called an uphill battle.
Martha
Stewart stands with members of her legal team outside Federal Court
in Manhattan after her sentencing July 16, 2004. Stewart was sentenced to
five months in prison, two years of supervised release and a $30,000 fine
after being convicted of lying about a suspicious stock sale. Attorney
Robert Morvillo is at lower left.
[Reuters]
| Just before she was sentenced, Stewart — who during her trial spoke only to
declare her innocence — rose from her seat and, her voice breaking almost to the
point of sobs, told the judge she feared her life would be "completely
destroyed."
Then, in an extraordinary change of demeanor, Stewart walked down the
courthouse steps, approached a microphone and denounced the scandal as full of
"such venom and such gore — I mean it's just terrible."
Smiling and showing her well-honed comfort with TV cameras, she even
suggested fans could "continue to show your support" by subscribing to her
magazines and buying her line of homemaking products.
And she vowed: "I'll be back. I will be back. Whatever I have to do in the
next few months, I hope the months go by quickly. I'm used to all kinds of hard
work, as you know, and I'm not afraid."
Investors sent the stock of Martha Stewart Living Omnimedia up 37 percent, or
$3.17 to close at $11.81 on the New York Stock Exchange.
Stewart resigned as CEO of the company when she was indicted last year and
gave up her seat on the board after she was convicted. She remains its leading
creative force and holds the title of founding editorial director.
In a four-page letter to the judge on the eve of sentencing, Stewart touted
her company's success and said she was still "abysmally confused and ill
prepared for what is described to me as the next step in this process."
She pleaded for leniency: "My hopes that my life will not be completely
destroyed lie entirely in your hands." It was signed, "Most sincerely, Martha
Stewart."
Prosecutors also released the pre-sentencing letter they sent to the judge, a
document that brushed aside defense claims Stewart and Bacanovic should get
lighter sentences because of exemplary conduct in their lives.
"Most of the good works cited by both defendants — showing kindness and
compassion for friends, family, staff and colleagues going through difficult
times, and acting as a role model for others in their professional lives — are
what one should expect of decent, hardworking people," they wrote.
The prison sentence punctuated a chain of events that began on Dec. 27, 2001,
when 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 biotechnology company run
by her longtime friend Sam Waksal.
Prosecutors alleged that Bacanovic, now 42, 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. Stewart saved $51,000.
Stewart and Bacanovic always maintained she sold because of a preset plan to
unload the stock when it fell to $60.
At his own sentencing, Bacanovic told Cedarbaum he deeply regretted "the pain
and the sorrow" the case had caused his family, friends, colleagues and clients.
The star witness against the pair 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."
But the verdict on March 5 — guilty on four counts apiece for Stewart and
Bacanovic — set off a string of events nearly as dramatic as the trial itself.
In April, lawyers for both defendants accused one juror of lying about an
arrest record in order to get on the trial. Cedarbaum denied a request for a new
trial, saying there was no proof the juror lied or was biased.
And in May, federal prosecutors accused Larry F. Stewart, a Secret Service
ink expert, of lying repeatedly in his testimony at the trial — mostly 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.
The juror issue and the perjury charges against Larry Stewart, no relation to
Martha Stewart, are expected to form the basis of Martha Stewart's appeal to the
2nd U.S. Circuit Court of Appeals.
Additionally, lawyers said Friday they will argue that prosecutors
inappropriately suggested at trial that Stewart was charged with insider trading
— a count never included in the indictment against her.
"The whole atmosphere of the trial was one about a crime that was never
charged and never happened," said Walter Dellinger, a lawyer hired specifically
to handle the appeal.
Defense lawyer Robert Morvillo had asked the judge for a sentence of merely
probation and community service working with poor women. He said Stewart "knows
she's not perfect" and deserved mercy.
"She has brought a measure of beauty to our everyday world with refined color
schemes, floral arrangements, and culinary delights," he said. "She has stood
for the values of quality and making products as perfect as possible."
Prosecutors, as they did when Stewart was indicted and throughout the trial,
portrayed the case as a matter of preserving the integrity of government
investigations.
"Citizens like Ms. Stewart who willingly take the steps to lie to officials
when they are under investigation about their own conduct, those citizens should
not expect the leniency that Ms. Stewart seeks," prosecutor Karen Patton Seymour
told the judge.
The judge noted she had received more than 1,500 letters from Stewart
supporters across the country pleading for leniency.
But she said a prison term was appropriate because "lying to government
agencies during the course of an investigation is a very serious matter,
regardless of the outcome of the investigation."
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