Although one judge has found this material was not grounds to retry the case, it will be the centerpiece of defense efforts for an appeal. It consists of a series of text messages, sent by ink expert Larry Stewart (no relation) to colleague Brittney King, that the lawyers argued tainted his testimony. Larry Stewart, the chief forensic scientist for the Secret Service, presented evidence to support the government's claim that Peter Baconovic, Martha Stewart's stockbroker, altered a document after the fact to show that the two had a pre-existing arrangement to sell ImClone stock. Larry Stewart has since been charged with having lied on the stand about whether he ever examined the document in question; on June 15 he pleaded not guilty to allegations from federal prosecutors that a subordinate actually performed the test.
In one of the messages, sent to King on Feb. 16, Larry Stewart appears to say he didn't do the testing and adds that it was flawed. Were (sic) still here at the US Attny office. They seem nervous about the ink Sue [Fortunato, Stewart's assistant] didnt test. She wrote the report without talking about the one entry she couldnt test and they wrote the indictment for Martha. In another message, Stewart seems aware of the possible legal peril when he describes the document, a worksheet that listed Martha's stock holdings at Merrill Lynch. The document, he says in a Feb. 18 message, was just [shown on a news program playing] on the big screen in Times Square saying an undisclosed expert was going to testify. Ohh s___. Would have made a cool pic for my office or jail cell. Martha's lawyers have seized on this as evidence that Stewart planned to give false testimony the next day in court.
Later that day, he sent another adding: Yeah they based their indictment on Sue's f___ed up report. In yet another message on Feb. 19 he confessed, Were (sic) going to lose this case big time. But the government didnt lose. Martha Stewart and Baconovic were convicted in March of lying to federal investigators about why she sold her shares of biotech firm ImClone Systems. They said there was a pre-existing arrangement to sell if the stock price hit $60. But prosecutors said she sold because Baconovic gave her a tip that ImClone CEO Sam Waksal was trying to dump his company stock.
Ironically, though Larry Stewart was brought in by the government to prove the allegation that Martha and Bacanovic lied about the pre-existing arrangement, the charge of creating a false document against Baconovic was the only one the jury didnt convict on. But Martha's lawyers argue that Larry Stewart's testimony influenced the verdict. Last Thursday, judge Miriam Goldman Cedarbaum denied the motion and with it the defendants last and best chance. Now, their only hope is an appeal.