Witness in Stewart Trial Is Charged With Perjury
NEW YORK -- Federal authorities charged a government witness from the Martha Stewart trial with perjury on Friday, accusing him of giving false testimony.
Prosecutors said they had discovered false statements made on the stand by Larry F. Stewart, a national ink expert who works at the Secret Service. He testified at her obstruction of justice trial about a worksheet prepared by Martha Stewart's broker, Peter Bacanovic.
Mr. Bacanovic was cleared on the only charge related to the worksheet -- that he added an "@60" notation to support a cover story for why Martha Stewart sold ImClone Systems stock late in 2001, just before the stock price plunged. However, he was convicted March 5 on other charges, including obstruction of justice.
Ms. Stewart was convicted on all charges, including making false statements and obstcruction. She is scheduled to be sentenced June 17, and faces 10 to 16 months in prison. It is unclear how this latest turn of events may affect any pending appeal of her convictions.
Shares of Martha Stewart Living Omnimedia Inc. surged as much as 18% on rumors ahead of the announcement.
On Friday, the government said it had uncovered false statements made by Larry Stewart on the stand. Among them was a statement that Mr. Stewart took part in an August 2002 examination of the worksheet.
Mr. Stewart, no relation to Martha Stewart, surrendered to federal agents earlier in the day and was expected to appear in court later Friday.
The two perjury counts against Mr. Stewart, 46, of Bethesda, Md., carry up to 10 years in prison.
During the trial, Mr. Stewart testified that a notation of "@60" on a worksheet that co-defendant Peter Bacanovic used to track Ms. Stewart's portfolio had been made in a different ink than other marks on the sheet. Mr. Stewart of the Secret Service said infrared and ultraviolet light tests had confirmed differences between the "@60" entry and other marks.
"The "@60" entry is a different ink than the remaining entries on the document," the scientist said.
The worksheet, among the most critical pieces of government evidence in the trial, is a summary of gains and losses in 36 stocks Ms. Stewart owned in late 2001 at Merrill Lynch & Co.
Mr. Bacanovic, at the request of investigators, in spring 2002 produced a worksheet from his discussions with Ms. Stewart in late December 2001 about her tax sale loss plan. The worksheet included the notation "@60" next to her ImClone shares.
Prosecutors say Mr. Bacanovic added the "@60" notation sometime in 2002 to bolster his story that he had reached an agreement with Ms. Stewart to sell her ImClone holdings if they fell below $60 a share.
Under cross-examination, the ink expert had testified it was impossible to tell how many pens had been used to mark on the document. Mr. Bacanovic's team contended he simply used different pens in his work.
The ink expert said he didn't initially test a handwritten dash that also glowed white under the infrared light in July or August 2002, instead testing it last month after defense experts had a chance to examine the document. The ink used to write the dash was partially contaminated by a highlighter that was used on the line. Mr. Stewart said that he wasn't able to determine if the "@60" notation and the dash were written by the same pen. He said he used up all of the ink sample from the dash conducting other tests.