Prosecution rests in Martha Stewart trial - East Valley Tribune: Get Out

Prosecution rests in Martha Stewart trial

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Posted: Friday, February 20, 2004 10:09 am | Updated: 5:09 pm, Thu Oct 6, 2011.

NEW YORK - The government rested its case against Martha Stewart and her stockbroker Friday, after a critical prosecution witness wavered slightly about testimony that had damaged the homemaking mogul.

Prosecutors called 21 witnesses over 14 days in the headline-making case. But whether the jury will hear from Stewart, or even deliberate on one of the charges against her, will remain a mystery until at least next week.

U.S. District Judge Miriam Goldman Cedarbaum said she would rule Monday on a motion by Stewart attorney Robert Morvillo to dismiss some or all the charges against his client - although she indicated that throwing out all the charges was unlikely.

Morvillo was particularly concerned about the charge of securities fraud, which the judge termed "the most problematic" in the indictment against Stewart.

The count accuses Stewart of deceiving investors in her own company, Martha Stewart Living Omnimedia, by announcing her ImClone Systems sale was proper. After a weekend of working on legal papers, both sides will make their arguments Monday morning on the dismissal motion.

The witnesses on the final day of the case against the multimillionaire homemaker included her erstwhile best friend, Mariana Pasternak, who provided Stewart with some wiggle room Friday after earlier damaging testimony.

On Thursday, Pasternak had testified that Stewart told her shortly after selling ImClone stock that she had been aware ImClone founder Sam Waksal was trying to dump his shares. In a separate conversation, Pasternak testified, Stewart told her, "Isn't it nice to have brokers who tell you those things?"

But under cross-examination Friday by Morvillo, Pasternak said it was possible that remark was simply a thought that crossed her own mind - not something Stewart said.

"It is fair to say I do not know if that statement was made by Martha or if that was just a thought in my mind," she said.

Prosecutor Michael Schachter, trying to bolster Pasternak's credibility, asked what her "best belief" was about the remark.

"That Martha said it," Pasternak replied.

Pasternak never wavered in the central element of her testimony - that Stewart was aware when she sold ImClone shares on Dec. 27, 2001, that Waksal had been trying to sell as well.

Stewart told investigators in April 2002 that she had no memory of being told about Waksal just before she sold.

Stewart and her co-defendant, broker Peter Bacanovic, claim they had an agreement to sell ImClone when the price fell to $60 per share. The government contends that was a cover story hatched after the ImClone investigation began.

Once Pasternak left the stand, the government sought to back up the testimony of Douglas Faneuil, a former Merrill Lynch & Co. assistant. The government's star witness testified that he passed the tip about Waksal from Bacanovic, his boss, to Stewart.

Faneuil initially supported the $60 story. But he struck a cooperation deal with the government in June 2002 and agreed to testify against Stewart and Bacanovic - an indication, the defense says, that he is a liar.

Two friends of Faneuil testified Friday that he was distraught in January 2002, long before he changed his account, and he confided in them that he was being pressured by his boss to lie.

Bacanovic's defense team was to begin presenting its witnesses later in the day. There was no indication whether Bacanovic or Stewart would take the stand in their own defense.

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