Stewart sentenced to five months

Domestic diva to serve home detention, pay fine

July 17, 2004|By Meredith Cohn | Meredith Cohn,SUN STAFF

Apologizing to supporters for "a small personal matter" that "became an almost fatal circus event," Martha Stewart was sentenced yesterday to five months in prison and five months of home detention for the stock-trading cover-up that upended her life, her company and her finely groomed image.

Dressed in characteristic high fashion down to her pale painted toenails, Stewart, 62, showed unusual emotion in pleading, ultimately unsuccessfully, with a federal judge to allow her to keep her freedom so she could continue serving her company and her country.

The prison sentence was stayed pending an expected appeal, which will not likely be heard until next year.

U.S. District Judge Miriam Goldman Cedarbaum said it was the minimum sentence she could impose, considering the crimes and sentencing guidelines. She said she had read and considered the 1,500 letters of support sent to the downtown Manhattan courthouse, Stewart's contributions to people outside of her family and her personal and professional suffering during the past 2 1/2 years.

Stewart was also fined $30,000 and given two years of supervised probation for her March conviction for lying and conspiring to obstruct an investigation into her 2001 sale of ImClone stock just before the share price dropped on bad company news.

Legal experts described the term as reasonable and thought the judge had reached a fair balancing in sentencing a celebrity.

The outcome was also perceived as reasonable on Wall Street, where shares of Martha Stewart Living Omnimedia Inc. jumped almost 37 percent, or $3.17, to close at $11.81.

The company remains stressed, however, with advertising down considerably and staff 200 workers lighter.

Stewart used the attention yesterday to asked supporters to buy her products and advertisers to return to her magazine as she works on her appeal.

If that appeal is unsuccessful, the judge recommended Stewart serve her sentence at the Danbury, Conn., prison camp, where she will work for pennies an hour cleaning or cooking and sleep in dorm-style housing.

The judge also asked Stewart to chose one of her roughly half-dozen homes, including a Westport, Conn., farm and an East Hampton house, in which to serve home detention. Stewart chose her estate in Bedford, N.Y.

While Stewart engaged the news media and her supporters after her sentencing at U.S. District Court for the Southern District of New York, her ex-Merrill Lynch broker, Peter Bacanovic, sentenced separately at 2:30 p.m. yesterday, hurried out of the courthouse into a red sport utility vehicle without public comment.

He was also given five months in prison and five months in home confinement, stayed pending his expected appeal. However, the fine for the 42-year-old Bacanovic, whom his lawyer described as unemployed and in debt, was $4,000.

Stewart's lawyers had asked the judge to ignore federal sentencing guidelines, citing a Supreme Court ruling last month that threw the guidelines into questionable constitutional territory. The ruling said judges cannot decide prison terms based on factors that juries did not hear.

Cedarbaum rejected ignoring the guidelines and imposed a sentence at the low end, but the judge said Stewart could pursue the matter on appeal.

Richard M. Strassberg, Bacanovic's lawyer, perhaps to counter the number of letters sent on behalf of Stewart to the judge, spent more than a half-hour at Bacanovic's sentencing reading many of the more than 250 letters sent by grateful clients and friends, even though the judge said she had already read them.

Lawyers for both Stewart and Bacanovic asked that their clients not have to wear ankle bracelets to monitor their whereabouts while on supervised probation in their homes. The judge said she believed, and legal experts agreed, that the federal probation department requires the bracelets. But the judge agreed to consult with officials in that department.

Stewart arrived 40 minutes early for her sentencing at 10 a.m., an event the New York Post tabloid labeled "D-Day" for the "Desperate Diva." Dressed in a simple black suit, she chatted with family and supporters, sipped bottled water and readied herself for what some legal experts expected to be imposition of a 10- to 16-month prison sentence.

The entire courtroom session, probably the most anticipated appearance of her career, lasted about a half-hour.

"Today is a shameful day, a shameful day for me and my family and for my beloved company and for its employees and partners," she told the judge and later repeated to media and supporters on the courthouse steps. "What was a small personal matter became over the last two years an almost fatal circus event of unprecedented proportions. ... I'm very sorry it has come to this."

Reporters, many of whom lined up before 6 a.m. to get a seat in one of a dozen wooden benches inside the courthouse, scrambled afterward to disseminate the news. That was made more difficult by security officials who had confiscated all their cell phones at the door.

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