- NEW YORK (Reuters)
- Martha Stewart (news - web sites) chose to "lie, conceal and cover
up" the truth about a suspicious stock sale that led to her federal
conspiracy trial, prosecutors said in closing arguments on Monday.
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- Stewart, who turned a catering company into a media empire,
is accused of staging a stock-tip cover-up with her former Merrill Lynch
& Co. broker, Peter Bacanovic. The jury will begin deciding their fate
later this week after closing arguments by prosecutors and defense lawyers.
But while prosecutors painted Stewart as a liar, Bacanovic's lawyer said
the case "makes no sense."
The jury of eight women and four men must determine if Stewart and Bacanovic
lied to investigators looking into the celebrity businesswoman's suspicious
sale of ImClone Systems Inc. stock in December 2001.
Prosecutor Michael Schachter told the jury in his three-hour closing argument
that the trendsetter opted to lie when she first was interviewed by investigators
with the U.S. Attorney's office and Securities and Exchange Commission
(news - web sites).
"Martha Stewart and Peter Bacanovic had two options -- tell the truth
or decline to be interviewed," Schachter said. "They chose an
option the law does not allow -- to lie, conceal and cover up."
Stewart, wearing a pale blue tweed jacket, gray slacks, a white blouse
and a string of pearls, watched the jury intently with a grim look on her
face. She has shown little emotion throughout the closely watched six-week
trial.
The 62-year-old Stewart faces one count of conspiracy, two counts of making
false statements and one count of obstruction of agency proceedings. Each
count carries a possible prison term of five years and a $250,000 fine.
Prosecutors say Bacanovic, 41, ordered his assistant to give Stewart a
tip that ImClone's founder, Sam Waksal, was dumping all of his shares.
Stewart then quickly acted on the news by selling all of her stock in the
biotech company.
ImClone shares fell steeply the next day after health regulators gave the
"thumbs down" to its cancer drug.
"It makes no sense what they are asking you to believe," Bacanovic's
lawyer Richard Strassberg said, adding that the prosecution rushed to bring
a case against Stewart.
The defendants maintain they had a pre-existing agreement to sell Stewart's
shares if ImClone fell to $60. Neither Stewart, a former model and stockbroker
who founded Martha Stewart Living Omnimedia Inc, nor Bacanovic took the
witness stand.
The prosecutor cited evidence including telephone records, messages and
the testimony of Douglas Faneuil, Bacanovic's former assistant and the
cornerstone of the government's case.
Faneuil, who pleaded guilty to related charges, said Bacanovic ordered
him to tip Stewart off about Waksal's sale of ImClone. Defense lawyers
battled to undermine his credibility and get him to admit to using drugs,
and implied his damaging testimony was in exchange for leniency from prosecutors.
"If you believe Douglas Faneuil's testimony, this trial is over,"
Schachter said. "Douglas Faneuil's demeanor on that witness stand
showed you he tried his level best to tell the truth. Ask yourselves this.
Why on earth would somebody make this up?"
But Strassberg said Bacanovic would never have asked his new assistant
to pass information about Waksal to Stewart.
"It makes no sense because it didn't happen," he said, noting
that Bacanovic built his reputation on his integrity and his trustworthiness.
He said Faneuil "embellishes and twists the facts" and had "extreme
motivation to shade the truth."
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-
Prosecutor Schachter also attacked testimony by a key witness for the defense,
Stewart's business manager Heidi DeLuca, who said she had a discussion
with Bacanovic in which he said he planned to put a so-called price floor
on Stewart's ImClone shares.
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- "Heidi DeLuca was at best confused," Schachter
said, telling jurors the "loyal" business manager mixed up two
conversations and that her story "crumbled just like the defendants'
story" when scrutinized.
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- Stewart scored a major victory on Friday when U.S. District
Judge Miriam Goldman Cedarbaum dismissed the most serious count of securities
fraud, which carried a possible 10-year prison sentence, on grounds of
a lack of evidence.
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- Stewart's lawyers were set to present her defense once
Bacanovic's lawyers concluded. Jury deliberations are likely to begin
on
- Wednesday.
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