- The Washington Times - Thursday, March 17, 2005

NEW YORK (AP) — A federal appeals judge yesterday sharply questioned a prosecutor in the Martha Stewart case about why no hearing was held about purported lies told by a juror in the celebrity homemaker’s trial.

The exchange came as lawyers for Stewart, freed from prison earlier this month and now serving five months of house arrest, sought to persuade a three-judge appeals panel to overturn her conviction for lying to the government.

Stewart, who attended yesterday’s session, is basing her appeal partly on accusations that juror Chappell Hartridge lied repeatedly on his jury questionnaire, including about a prior arrest, in order to get on the jury.

Judge Richard Wesley, one of the appeals judges, asked prosecutor Michael Schachter whether the trial had been tainted because trial Judge Miriam Goldman Cedarbaum held no hearing about the purported lies by Mr. Hartridge.

Judge Wesley mused about why jurors might actively want to serve on certain high-profile juries: “I don’t like rich people. I don’t like people like Martha Stewart who are worth millions of dollars.”

“The problem is, why did he lie?” Judge Wesley said. “And there is no answer to that because Judge Cedarbaum didn’t do the hearing.”

Mr. Schachter defended the judge and asserted that the convictions must be upheld, saying Judge Cedarbaum had no obligation to hold a hearing because the defense failed to show Mr. Hartridge was deliberately dishonest.

Stewart was convicted in March 2004 of lying to the government about why she sold nearly 4,000 shares of ImClone Systems Inc. stock the day before a negative government ruling about an ImClone cancer drug.

The prosecutor also cited what he called “ample evidence” of Stewart’s guilt — including evidence that her next call after selling ImClone was to ImClone founder Sam Waksal’s office, demanding to know why the stock was falling.

Waksal is serving a seven-year prison sentence after admitting he sold his own ImClone shares because he knew in advance that the government would decline to review the cancer drug, Erbitux.

Stewart was allowed to leave the Westchester County estate where she is serving house arrest to attend the appeals hearing in Lower Manhattan. She also is allowed to leave her home 48 hours per week for work.

Wearing a black, pinstriped pantsuit that obscured the electronic monitoring bracelet she must wear on her ankle, Stewart appeared in a good mood, joking with marshals as she passed through a metal detector.

The three-judge panel gave no indication of how or when it might rule. Stewart has said she is appealing the case to clear her name.

Walter Dellinger, Stewart’s appeals lawyer, also came under intense questioning from the judges when he suggested the conviction should be thrown out because of perjury accusations against a government witness.

The witness, Secret Service ink expert Larry Stewart, was accused by prosecutors of exaggerating the role he played in testing a stock worksheet that was used as evidence at the trial. A separate jury acquitted him of perjury charges.

But the three-judge panel pointed out that the jury acquitted Stewart and her broker, Peter Bacanovic, of any charge that they lied when they suggested they had a specific agreement to sell ImClone at $60 per share.

“Had there been a conviction of ‘at $60,’ it’d be absolutely compelling,” Judge Wesley said.

The judge then focused on trial testimony that Stewart altered a computer log of a message from Bacanovic just four days before she told investigators she had no recollection of whether Bacanovic had left her a message.

“Tell me how the ink expert makes that suspect,” Judge Wesley said, suggesting there was other evidence behind the conviction.

The government says the conviction is solid and was based on overwhelming evidence. Legal experts have said it would be a long shot for the appeals court to overturn the verdict.

Stewart was released from a federal women’s prison in Alderson, W.Va., on March 4, after serving five months there — the first half of her sentence. Bacanovic, a former Merrill Lynch & Co. broker, is serving a five-month prison sentence for lying to investigators.

Shares of Stewart’s company, Martha Stewart Living Omnimedia Inc., fell 9 cents to close at $22.47 in trading on the New York Stock Exchange yesterday. They traded higher than $35 as recently as late February.

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