- The Washington Times - Tuesday, February 24, 2004

NEW YORK (AP) — Martha Stewart will not take the stand in her own defense at her stock-fraud trial, her attorney said yesterday.

Attorney Robert Morvillo said Mrs. Stewart’s defense team would call just one witness — a former lawyer who attended an interview Mrs. Stewart gave to investigators in 2002. That witness is expected to testify today.

Lawyers for Mrs. Stewart’s former stockbroker, Peter Bacanovic, presented their last witness yesterday and will rest their case today as well. Bacanovic spokesman Lou Colasuonno said yesterday that the broker’s defense team believes “the government hasn’t made its case.”

Earlier yesterday prosecutors aggressively attacked the credibility of a business manager for Mrs. Stewart, who helped the defense on Monday when she said Mrs. Stewart’s broker had mentioned a desire to unload Mrs. Stewart’s ImClone shares at $60 or $61.

Heidi DeLuca placed the conversation on Nov. 8, 2001, about seven weeks before Mrs. Stewart sold 3,928 shares of ImClone Systems stock.

Miss DeLuca, who handles finances for Martha Stewart Living Omnimedia and for Mrs. Stewart, also testified that Mrs. Stewart billed her company for the luxurious vacation she took just after selling her ImClone Systems stock in 2001. Miss DeLuca testified she was instructed to submit the vacation for reimbursement as a business expense.

Mrs. Stewart and her friend, Mariana Pasternak, ran up a bill of about $17,000 on the vacation at the Las Ventanas resort in Los Cabos, Mexico, for meals, spa treatments and a hiking trip.

While Miss DeLuca did not specifically say Mrs. Stewart ordered the reimbursement, she has said she reports directly to Mrs. Stewart.

“I did not make an independent assessment,” she said. “I’m given information, I submit it, and somebody else is the one who reviews it and rejects or accepts it.”

Also yesterday, Mr. Bacanovic’s lawyers called securities expert John Maine to testify about the dramatic drop in ImClone’s stock price on the day Mrs. Stewart sold. Mr. Maine said the price of the stock was “falling out of bed” while the Nasdaq Stock Market as a whole was up.

“To see a stock behaving this dramatically against the market in a vacation week is quite stunning,” he said.

Lawyers for Mrs. Stewart and Mr. Bacanovic are trying to show Mrs. Stewart was giving her best recollection when she told investigators she and the broker had arranged to sell ImClone stock at $60.

The existence of a plan to sell the ImClone shares is central to Mrs. Stewart’s defense.

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