Defense in Stewart Case Rests
Confident that the government has failed to prove fraud and obstruction charges beyond a reasonable doubt, Martha Stewart’s defense rested Wednesday after calling a single witness.
With the defense for Peter E. Bacanovic also resting Wednesday, U.S. District Judge Miriam Goldman Cedarbaum scheduled closing arguments for Monday and Tuesday.
Stewart, 62, and Bacanovic, 41, face charges of conspiracy, obstruction of justice and lying to the government in connection with an alleged coverup that followed Stewart’s Dec. 27, 2001, sale of $228,000 worth of ImClone Systems Inc. stock. The sale came a day ahead of bad news for the drug company that sent the stock tumbling.
Stewart and Bacanovic contend that they had an arrangement to sell her ImClone stock if the price fell to $60 a share.
In the last day of testimony Wednesday, the prosecution again attacked the credibility of defense witnesses.
Lead prosecutor Karen Patton Seymour played jurors part of a recording of Bacanovic being interviewed by investigators several months after Stewart’s ImClone trade. On the tape, Bacanovic said he had not told Stewart’s business manager, Heidi M. DeLuca, about any discussions to set a so-called exit price at $60 for ImClone stock.
But in her testimony for Bacanovic’s defense Monday, DeLuca recalled a conversation with the broker on Nov. 8, 2001, in which he called ImClone “a dog” and said he would try to persuade Stewart to get rid of the stock if it fell to $60 or $61.
Stewart’s lone witness was Steven Pearl, a former lawyer for a firm that had represented Stewart during her Feb. 4, 2002, interview with government investigators. As a junior lawyer, Pearl’s job was to take notes on the interview, which was not tape-recorded.
Pearl’s notes conflicted with those of FBI Special Agent Catherine M. Farmer, whose account of the interview was the basis of one of the charges -- that Stewart lied to the government. Farmer said that in answer to a question about whether her personal assistant, Ann E. Armstrong, kept a log of incoming phone calls, Stewart falsely said that she didn’t know.
Pearl’s memo on the interview, which he had typed from his handwritten notes on the same day, indicated that Stewart’s “don’t know” answer was in response to a different question.
Seymour shook that account slightly on cross-examination by pointing out that Pearl’s handwritten notes were a bit different from his typed memo. The defense earlier had exposed similar discrepancies between Farmer’s notes and her typed memo.
Cedarbaum continued to keep lawyers in suspense about whether she would dismiss some of the charges -- particularly securities fraud, which she last week called “the most problematic” of the charges. Legal experts said Cedarbaum could wait until after the jury’s verdict to throw out charges.
Stewart could face as much as 10 years in prison if convicted on all charges.
The judge said she would give lawyers a draft of her proposed legal instructions to the jury late today and confer with them Friday morning to get their views on any modifications.
The order for closing arguments will be prosecutor Michael S. Schachter on Monday morning, Bacanovic lawyer Richard M. Strassberg on Monday afternoon, Stewart lawyer Robert G. Morvillo on Tuesday morning and Seymour on Tuesday afternoon.
Cedarbaum said she would turn the case over to the jury of eight women and four men Wednesday.
