- The Washington Times - Monday, March 1, 2004

NEW YORK (AP) — Telling careful lies but making careless mistakes, Martha Stewart and her stockbroker were bent on keeping investigators from the truth about why the homemaking icon sold stock, a federal prosecutor said yesterday.

In a methodical three-hour closing argument, prosecutor Michael Schachter told jurors that Mrs. Stewart and broker Peter Bacanovic thought they would never be caught in their deception.

“But Martha Stewart and Peter Bacanovic were wrong,” Mr. Schachter said. “They left behind a trail of evidence exposing the truth about Martha Stewart’s sale and exposing the lies they would tell.”

Mrs. Stewart and Mr. Bacanovic face federal charges related to the government’s contention they lied about why Mrs. Stewart sold about $225,000 worth of ImClone Systems stock on Dec. 27, 2001.

Prosecutors say Mr. Bacanovic sent word to Mrs. Stewart that ImClone CEO Sam Waksal and his family frantically were dumping their shares. The stock fell sharply after the government announced the next day that it was declining to review an ImClone cancer drug.

Mr. Schachter spent much of his argument trying to dismantle the centerpiece of Mrs. Stewart and Mr. Bacanovic’s defense — that they had struck a deal before Dec. 27 to sell Mrs. Stewart’s shares when ImClone stock dropped below $60.

The prosecutor listed seven reasons jurors would know that the $60 agreement is a lie, calling it “phony,” “silly” and “simply an after-the-fact cover story.”

Among the reasons: The pair have no record of having made the plan, other than a worksheet produced by Mr. Bacanovic with the notation “(at)60” next to ImClone stock — in a different ink from other marks on the page.

Mr. Schachter also listed inconsistencies — mistakes, he called them — in the stories Mrs. Stewart and Mr. Bacanovic told federal investigators looking into the ImClone trade in early 2002.

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