Martha gets 5mos prison time, 2yrs probation

Post by **haas mark** » 2004-07-16 10:37am

Clicky!

Still a developing story, but I just got the e-mail notice.

Post by **haas mark** » 2004-07-16 10:57am

From staff and wire reports
NEW YORK — A federal judge sentenced Martha Stewart to five months in prison this morning for her conviction for four felony charges in March.

Stewart also received two years of probation, including five months of monitored home detention, and was fined $30,000.

"Today is a shameful day. It's shameful for me and my beloved family and my company," Stewart told reporters after sentencing. But she promised, "I'll be back. I will be back."

She called the case "a small personal matter" that had been blown out of proportion, and said she was particularly sorry for the more than 200 employees of her company, Martha Stewart Living Omnimedia, who lost their jobs in the wake of the case.

"I want them to know how very, very sorry I am for them and their families," she said.

Just before her sentence was pronounced, Stewart asked U.S. District Judge Miriam Goldman Cedarbaum to "remember all the good I have done."

Cedarbaum noted that she had sentenced Stewart on the bottom of the confinement range of 10 to 16 months.

Stewart's lawyers said they would appeal the case. "We believe there are very significant issues to be brought before the court of appeals," Walter Dellinger, one of Stewart's attorneys, told reporters.

Stewart, dressed entirely in black, arrived at a federal courthouse about 9:15 a.m. ET Friday, and the sentencing hearing began shortly after 10. She has enlisted a sentencing consultant to work with her team of lawyers to avert the 10- to 16-month jail term that federal sentencing guidelines mandate.

CNBC reported Stewart spoke in court for the first time to express remorse for the pain she caused to employees and shareholders of her company, Martha Stewart Living Omnimedia. The network reported she choked back tears as she sought "to seek the opportunity to repair the damage."(Related video: Stewart prepares for sentencing)

Former Merrill Lynch broker Peter Bacanovic will be sentenced later today on obstruction charges stemming from the Stewart investigation.

Since Stewart was found guilty of obstructing the federal investigation into her sale of ImClone stock in December 2001, her lawyers twice challenged the verdict, once after discovering that a juror misrepresented his legal history on a questionnaire and again after the government charged one of its own witnesses with perjury.

At the hearing, Stewart :

• Cited more than 1,000 letters from friends and fans to implore Cedarbaum to consider community service as an alternative to prison.

• Requested that if a sentence is imposed, she remain free until her appeals are exhausted.

Legal analysts had predicted Cedarbaum would allow Stewart to put off a prison term until the appellate court hears her case.

Earlier this week, Cedarbaum denied a motion by Stewart's lead lawyer, Robert Morvillo, to declare the federal sentencing process unconstitutional. The motion was based on a Supreme Court decision last month to throw out a sentence imposed by a Washington state judge on grounds that the stiffness of the penalty was based on factors never brought before a jury.

Jack Coffee, a securities law expert at Columbia University, says he doubts Cedarbaum will let Stewart avoid prison altogether. "If she gets no jail time,"Coffee says, "it would be proof of the belief that poor people go to prison and the rich get alternative sentences."

In the final weeks before Stewart's sentencing, hundreds of well-wishers sent letters to the judge asking for mercy.

"I am alone now with my pets," a woman named Ruth Ritter wrote to the judge in careful script. "Just seeing Martha doing her crafts, cooking, gardening, was a great comfort to me."

From Springfield, Ohio, four middle-school cooks and a custodian wrote: "Martha Stewart has been an inspiration for women across the nation. ... A hardworking, delightful character that shares her creative ideas with everyday people like us."

It was 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 company run by her longtime friend Sam Waksal.

Prosecutors alleged that Bacanovic, 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. 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.

But the verdict on March 5 — guilty on four counts apiece for Stewart and Bacanovic — set off a string of events 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. The Stewarts are not related.

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.

Both the juror issue and the Larry Stewart perjury charges are expected to form the basis of the appeal.

Stewart resigned as CEO of Martha Stewart Living Omnimedia Inc., once a $1 billion media empire, when she was indicted in 2003. She gave up her seat on the board after she was convicted, but remains founding editorial director.

In late 2003, just weeks before her trial was to begin, Stewart told ABC News that "what I did was not against the rules." She also said she was afraid of prison.

She added: "But I don't think I will be going to prison, though."

JME2 · Post by **JME2** » 2004-07-16 11:21am

I don't believe this. With cases like this, is it any wonder why I sometimes bitch about the justice system?

Stormbringer · Post by **Stormbringer** » 2004-07-16 11:31am

JME2 wrote:I don't believe this. With cases like this, is it any wonder why I sometimes bitch about the justice system?

Considering that they didn't even charge her with the orginal charges for which she was investigated, I'm suprised it's gone this far to be honest.

Mayabird · Post by **Mayabird** » 2004-07-16 01:18pm

*shrugs*

I always thought that trying to nail Stewart was just a witchhunt to distract people from the bigger crooks like Ken Lay and co. $51,000? She's small fry, and $30,000 out it is fined away now anyway.

Stormbringer · Post by **Stormbringer** » 2004-07-16 01:59pm

Mayabird wrote:*shrugs*

I always thought that trying to nail Stewart was just a witchhunt to distract people from the bigger crooks like Ken Lay and co. $51,000? She's small fry, and $30,000 out it is fined away now anyway.

A distraction? No. A case that had to go this far because of the Ken Lay and Co? Yes.

The only reason they prosecuted this as agressively as they did (and again you'll note they didn't wind up filing insider trading charges) was because of the timing and her celebrity. For a peanuts case like this they would have just fined her the money and maybe then some and they certainly wouldn't have gone into these secondary (and flimsy) charges.

Gil Hamilton · Post by **Gil Hamilton** » 2004-07-16 02:41pm

Is it not ironic that they nailed her for saving $51,000 dollars via insider trading even though Martha Stewart makes so much money that she likely loses that much in her couch cushions every day*? Meanwhile, they bust others who's stats involve shady dealings involving megabucks who get tiny slaps on the wrists and little if any prison time. This is just trying to send the message that if you're a celebrity businessperson and you get caught, you too can be sent to a hotel that you aren't allowed to check out of.

*OK, Martha Stewart probably has cushion protecters that sort and conveniently stack loose change up to 100 kilodollars, thus she doesn't lose it. It's a good thing.

Col. Crackpot · Post by **Col. Crackpot** » 2004-07-16 02:43pm

Mayabird wrote:*shrugs*

I always thought that trying to nail Stewart was just a witchhunt to distract people from the bigger crooks like Ken Lay and co. $51,000? She's small fry, and $30,000 out it is fined away now anyway.

uhhh, you do know that Ken Lay was indicted last week, right?

kojikun · Post by **kojikun** » 2004-07-16 03:21pm

Man.. I wonder if she'll use her new rep from prison as a selling point.. The only interior decorator for truThugz. XD

Chardok · Post by **Chardok** » 2004-07-16 03:51pm

There was much rejoicing.

Knife · Post by **Knife** » 2004-07-16 08:38pm

Col. Crackpot wrote:
uhhh, you do know that Ken Lay was indicted last week, right?

shhhhh, that doesn't fit into their conspiracy theory.

Martha had to go down, if you expect Lay or the Global Crossing guy to be charged at all. If you can't smack someone for a straight forward fuckup, how the hell do you expect to get the big wigs?