- NEW YORK (Reuters) - U.S.
prosecutors in the Martha Stewart securities fraud case plan to go forward
with witnesses on Monday despite a court ruling that forces them to delay
testimony at the heart of the criminal charges against the trendsetter
and her former broker.
-
- The Manhattan U.S. Attorney's office declined to say
who they would call as a witness when the trial resumes following a judge's
decision to postpone the testimony of Douglas Faneuil, a key prosecution
witness and a former assistant to Stewart's broker Peter Bacanovic.
-
- U.S. District Judge Miriam Goldman Cedarbaum pushed back
Faneuil's appearance until next week because prosecutors withheld documents
that might be used to raise doubts about his testimony. He had been slated
to take the stand on Thursday.
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- "We will be going forward with witnesses,"
a spokesman for the U.S. Attorney's office said on Friday.
-
- Cedarbaum ordered the delay to give defense lawyers time
to examine documents that prosecutors had in their files for over a year.
The papers were only turned over to defense lawyers this week, after the
trial had already started.
-
- The delay threw off the government's case by forcing
it to change the order of witnesses. Assistant U.S. Attorney Karen Patton
Seymour told the judge during a hearing on Thursday that the postponement
would "impact the government's presentation" because Faneuil
would provide "extensive background" for the charges against
Stewart and Bacanovic.
-
- Prosecutors are required by law to turn over evidence
prior to the trial that could help acquit a defendant.
-
- Lawyers for Bacanovic, who is charged with helping Stewart
cover-up a suspicious stock trade, believe the new evidence might help
their client's case. However, it did not appear that the documents would
necessarily aid Stewart, apart from upsetting the prosecution's witness
presentation plans.
-
- Faneuil is now set to testify next Thursday, one week
after his appearance was originally scheduled. He is expected to tell jurors
that Stewart sold nearly 4,000 shares of ImClone Systems Inc. on Dec. 27,
2001 after he tipped her off that the company's founder, Sam Waksal, a
friend of hers, was dumping stock.
-
- At issue is an ambiguous statement that Faneuil's former
defense lawyer Jeremiah Gutman gave investigators a year ago.
-
- The defense interpreted the document to read that Gutman
told investigators that Faneuil could not recall whether Bacanovic or Waksal
instructed him to tip off Stewart. However, prosecutors said it was Gutman
with the faulty memory. They said it was Gutman himself who could not recall
Faneuil's statement about which man gave the order.
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- If enough doubt can be established as to who ordered
Faneuil to reveal confidential stock information, it could undermine the
government's charges that Bacanovic lied about his involvement in Stewart's
suspicious stock sale. © Reuters 2004. All Rights Reserved.
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