Judge Says No Retrial for Martha Stewart

A federal judge on Thursday denied Martha Stewart’s request for a new trial, declaring that the evidence against her was so overwhelming that the alleged perjury of a government witness did not compromise her March 5 criminal conviction.

The 43-page ruling by U.S. District Judge Miriam Goldman Cedarbaum clears the way for Stewart to be sentenced July 16 for lying to government investigators about a 2001 stock sale. Legal experts say she is likely to get a prison term of 10 to 16 months.

Defense attorneys have argued that the alleged perjury of a government ink expert -- disclosed after the conviction -- tainted the jury and necessitated a new trial for Stewart and her former stockbroker, Peter E. Bacanovic. They had previously claimed that a juror in the case lied about his background during jury selection.

But Cedarbaum said there was ample proof of Stewart’s and Bacanovic’s guilt.

“Because there is no reasonable likelihood that this perjury could have affected the jury’s verdict and because overwhelming independent evidence supports the verdict,” the retrial motion is rejected, she wrote.

Stewart’s lead attorney said he was very disappointed by the ruling and vowed to appeal.

“We continue to believe that the unprecedented double perjury -- by both a key government witness and a juror -- prevented Martha Stewart from receiving a fair trial,” her attorney, Robert G. Morvillo, said in a statement. “We intend to raise these and other substantive issues on appeal.”

Courts traditionally are loath to nullify jury verdicts, legal experts said, even when prosecution witnesses are shown to have lied.

“The appeals court has made it clear in a long line of decisions that the mere fact that a witness has committed perjury, even on an important matter, does not by itself warrant a new trial,” said Mark Zauderer, a partner at business law firm Piper Rudnick in New York.

Anthony Pacheco, a former federal prosecutor now at Proskauer Rose in Los Angeles, criticized Cedarbaum’s decision, saying the government “trotted out a purported superstar” ink analyst who added heft to the overall prosecution case.

Pacheco also questioned Cedarbaum’s refusal to hold a hearing to consider the perjury issue in depth.

“Why would we tolerate lies that could have been relied on by the jury?” Pacheco said. “Why not investigate the matter further and get to the bottom of it?”

Stewart was convicted of conspiracy, obstruction of justice and two counts of lying to investigators to cover up her sale of shares in ImClone Systems Inc. on Dec. 27, 2001. The jury found that Stewart’s sell-off came after she was tipped by Bacanovic’s assistant that company founder Samuel D. Waksal and his family were dumping ImClone shares.

The next day, the Food and Drug Administration denied approval of an ImClone cancer drug.

Bacanovic was convicted of conspiracy, perjury, obstruction and lying to investigators. He was acquitted of making a false statement.

The case took a bizarre twist in May, when prosecutors charged Larry F. Stewart, the U.S. Secret Service’s forensics lab director, with lying on the stand. (The two Stewarts are not related.)

Cedarbaum said that Larry Stewart’s alleged lies centered on his involvement in a lab analysis of a critical document, but that the scientific conclusion was not in dispute.

“There is no reasonable likelihood” that Larry Stewart’s alleged lies about his role in the probe “could have affected the verdict,” Cedarbaum wrote.

“The most critical aspects of his scientific analysis were corroborated by the defense” at trial, she added.

Ultimately, the charge directly related to Larry Stewart’s testimony -- that Bacanovic falsely altered the brokerage form -- was the one count of which Bacanovic was acquitted. Martha Stewart was not accused of that charge.

Cedarbaum wrote that Martha Stewart was convicted on the testimony of Bacanovic’s assistant, Douglas Faneuil, as well as that of Stewart’s assistant, Ann E. Armstrong, and a friend, Mariana Pasternak.

Pasternak testified about a conversation she had with Stewart on her ImClone stock sale.

Armstrong testified that Stewart asked her to alter a potentially incriminating message on her computer from Bacanovic before reconsidering and telling her to restore the original.