Martha Stewart likely to leave jet-set world for prison today

Federal guidelines suggest a jail term of 10-16 months

Khaki uniform may await her

Executive Trials

July 16, 2004|By Meredith Cohn | Meredith Cohn,SUN STAFF

NEW YORK - Martha Stewart, who built an empire on living with grace, today faces the prospect of living without freedom.

Stewart's sentencing for lying, conspiring and obstructing an investigation into the 2001 sale of her ImClone Systems stock is scheduled for this morning at the downtown federal courthouse.

Many legal experts expect her to follow other formerly rich and powerful corporate leaders to prison for at least 10 months.

After a widely followed six-week trial in March, Stewart and her Merrill Lynch stockbroker Peter E. Bacanovic were convicted and have been twice denied new trials. An appeal is expected.

U.S. District Judge Miriam Goldman Cedarbaum could delay a prison sentence while awaiting the appeal or could order Stewart and Bacanovic to prison pending the appeal.

Legal observers predict the judge will likely sentence Stewart to 10 to 16 months in prison based on federal guidelines and a probation officer's report. The latter includes information from prosecutors and defense attorneys as well as her finances and her lack of a criminal record.

"She won't literally be behind bars. She'll likely end up in a prison camp facility," said John J. Falvey Jr., a lawyer in the litigation practice group at Testa, Hurwitz & Thibeault LLP.

"I very much expect her to be sentenced in that range. Congress announced via the sentencing guidelines that it wants to send a huge deterrent message, and given the publicity of this case, the judge would be hard-pressed to divert from the guidelines."

Stewart also could be sentenced to perform community service, although she is unlikely to receive the 1,000 hours she had proposed serving in exchange for reduced prison time, legal experts said.

She could be ordered to pay a fine of less than $50,000, which is about what she saved when she sold her stock in ImClone Systems Inc. a day ahead of bad news reported by the company - the trade that attracted federal investigators' attention.

It's also far less than her salary listed in Martha Stewart Living Omnimedia Inc.'s 2003 annual report. As chief creative officer, a title she relinquished a week after her conviction, she earned a $900,000 salary and a $500,000 bonus, among other compensation. Stewart stepped down in June 2003 as chief executive of the company she founded and ran.

If Stewart is sent to prison, it will be a stark change for the multimillionaire entrepreneur who has made good taste her business.

Because her home is in Westport, Conn., the federal Bureau of Prisons most likely will send her to the federal women's prison camp in Danbury, Conn., which is 70 miles from New York.

Other celebrities who've been sent there include hotel magnate Leona Helmsley. Before it converted to women only in 1988, the camp was home to the Rev. Sun Myung Moon and Watergate conspirator-turned-talk show host G. Gordon Liddy.

Danbury is a minimum-security camp, the lowest security level in the system. But it's no Four Seasons Hotel. According to the Federal Bureau of Prisons, white-collar criminals sleep next to drug offenders, albeit nonviolent, mostly first-timers.

All offenders wear khaki military uniforms and they all work 7 1/2 hours a day, said Dan Dunne, a bureau spokesman.

The camp, next door to the main federal correctional institution in the state, currently has 196 offenders housed dormitory-style. They sleep in bunk beds on sheets with thread counts well below 700.

The offenders at the camp are mostly white, from New England and guilty of drug offenses or fraud, bribery and extortion. The median age is 37.7 years and the median sentence length is 37 months.

The food is more military than Martha.

And everyone works at jobs such as cleaning and grounds keeping. The pay: 11 cents to 30 cents an hour.

"It's not a comfortable setting," Dunne said. "Inmates are not afforded unnecessary privileges."

There is a television in the common room and magazines in the library. Shopping is limited to a commissary, but magazine subscriptions are allowed.

Stewart had hoped to avoid prison with the offer of community service at Women's Venture Fund, a New York nonprofit group that aids disadvantaged women entrepreneurs.

Her defense lawyers also unsuccessfully sought new trials twice. The first motion contended that a juror on Stewart's case had lied about his background. The second motion came after federal prosecutors charged one of their own trial witnesses with perjury. That motion led the judge to delay sentencing until today.

Stewart has maintained her innocence through her Web site, She said she has received 170,000 supportive e-mail messages and promised, "I will continue to do everything I can to help people bring `good things' into their homes and their lives."

Since Stewart's legal woes began, her namesake company has taken some hits.

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