Martha Gets Five Months

Gets five months in jail, two years' probation, $30,000 fine for lying to feds about suspicious stock sale

By Lia Haberman Jul 16, 2004 9:15 PMTags

The grand dame of good things will have to go without for a few months.

On Friday morning Martha Stewart was sentenced to five months in jail, five months of home confinement, two years of supervisory probation and was ordered to pay a $30,000 fine following her March 5 felony conviction on charges she lied to the feds about a 2001 stock sale.

The domestic doyenne was found guilty of conspiracy, obstruction of justice and two counts of making false statements.

But Stewart won't be living behind bars anytime soon. The sentence has been stayed pending an appeal from Stewart's defense team. Her lawyers said perjury charges against a juror and a key government witness would be a part of the appeal, due to be filed within the next 10 days. The petition could keep her out of prison for a year or more.

Her former stockbroker, Peter Bacanovic, is also out on the streets pending an appeal of his virtually identical sentence, handed out hours after Stewart's: five months in prison, five months of house arrest, two years' probation and a $4,000 fine.

Stewart, dressed in a simple black pantsuit, arrived at a federal courthouse in Manhattan just after 9 a.m. ET and was accompanied by her daughter, Alexis, and her son-in-law. She was greeted by supporters outside and inside the courtroom.

Speaking on her behalf before sentencing, Stewart said, "Today is a painful day, what started out as a personal matter has spread like oil."

She asked the judge to "please consider all the suffering I have experienced over the past two and a half years" and to "remember all the good I have done."

According to reporters in the courtroom, Stewart was close to weeping while reading her statement.

Once outside, Stewart addressed the press, saying she was not afraid, just "very, very sorry that it's come to this."

"Today is a shameful day, it's shameful for me and for my family and for my beloved company and for all of its employees and partners. What was a small personal matter became over the last two years an almost fatal circus event of unprecedented proportions," said Stewart.

"I have been choked and almost suffocated to death during that time all the while more concerned about the well-being of others than for myself, more hurt for them and for their losses than for my own, more worried for their futures than the future of Martha Stewart, the person.

"More than 200 people have lost their jobs at my company as a result of this situation. I want them to know how very, very sorry I am for them and their families. I would like to thank everybody who stood by me, who wished me well, waved to me on the street...smiled at me, called me, wrote to me. We received thousands of support letters and more than 170,000 emails to Marthatalks.com, and I appreciate each and every one of those pieces of correspondence. I really feel good about it.

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"Perhaps all of you out there could continue to show your support by subscribing to our magazine, by buying our products, by encouraging our advertisers to come back in full force to our magazines. Whatever happens to me personally shouldn't have any effect whatsoever on the great company Martha Stewart Living Omnimedia.

"And I don't want to use this as a sales pitch for my company, but we love that company, we've worked so hard on that company, and we really think it merits great attention from the American public.

"And 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, I'm not afraid whatsoever. I'm just very, very sorry that it's come to this, that a small personal matter has been able to be blown out of all proportion and with such venom and such gore, it's just terrible," she concluded.

Stewart's concerns for her company may be misplaced. Her empire seemed to rebound Friday, with shares of Martha Stewart Living Omnimedia rising as much as 40 percent during the day before closing up 37 percent, or $3.17 per share, to $11.81.

The company, which offered Stewart its "full support," issued a statement saying it was "heartened that Judge Cedarbaum recognized Martha's strong public support and her lifetime of contributions to others--past, present, and future--that we in the Company know so well.

"After 26 months of uncertainty, we see this as an important step toward closure for MSO," added the statement.

Under federal sentencing guidelines she was expected to spend 10 to 15 months in the slammer, most likely in a minimum-security federal prison camp in Danbury, Connecticut. (Her lawyers had argued unsuccessfully to have the guidelines banned.)

U.S. District Court Judge Miriam Goldman Cedarbaum did show some sympathy to Stewart's plight, saying, "I do believe you have suffered and will continue to suffer," adding that she had read all 1,500 letters sent on Stewart's behalf.

"The sentence I have just imposed is, in my opinion, the minimum permitted under current law," the judge said, adding, "I have not lost sight of the seriousness of the offense of which you have been convicted. lying to government agencies during the course of an investigation is a very serious matter."

Stewart will reportedly spend her five-month in-home lockdown on her $40 million, 153-acre spread north of New York City. However, officials say Stewart will be wearing an electronic bracelet that will prevent her from wondering far from the farm's main house.

In a bid to avoid incarceration altogether, Stewart's legal team had pushed for community service coupled with probation and hired a sentencing consultant to match the domestic doyenne with a nonprofit organization where she could serve her time.

A letter-writing campaign conducted by Stewart supporters also appealed to the judge for leniency. "Martha Stewart has been an inspiration for women across the nation," wrote four middle school cooks and a custodian from Springfield, Ohio.

Originally scheduled to be sentenced June 17, Stewart managed to delay the date when evidence was uncovered that a government witness repeatedly lied under oath.

Secret service ink expert Larry Stewart (no relation to the homemaking maven) was subsequently indicted for fibbing about his role in tests performed on a portfolio worksheet prepared by Stewart's former stockbroker Peter Bacanovic.

But the judge was unmoved and rejected Team Stewart's bid for a new trial. (A prior motion to dismiss based on the shady past of one of the jurors was also overruled.)

Meanwhile, Stewart has spent her pre-slammer days getting her affairs in order and enjoying her freedom. According to the New York Post, the 62-year-old has unloaded her luxury Greenwich Village duplex (Nicole Kidman and Calvin Klein are neighbors) for around $7 million, making a profit of approximately $1 million.

In addition, the New York Times is reporting that Stewart has remained a fixture on the Manhattan social scene in recent days, attending fashion shows, parties and even the New York premiere of Fahrenheit 9/11.

(Originally published at 7:15 a.m. PT.)