Jury Deciding Martha's Fate

Martha Stewart enters Manhattan federal court with her daughter Alexis, unseen, Wednesday, March 3, 2004, in New York. The jury of eight women and four men was to begin deliberating the fate of the celebrity homemaker Wednesday after receiving a lengthy set of instructions from the judge overseeing the case. Stewart is on trail for conspiracy and obstruction of justice. (AP Photo/ Louis Lanzano)
AP
The Martha Stewart jury requested evidence related to a key prosecution witness on Wednesday as it began wrestling with the question of whether the homemaking icon lied about a stock sale.

After about two hours of deliberations, jurors sent out a note asking for the evidence related to the testimony of former brokerage assistant Douglas Faneuil.

The jurors asked for a readback of testimony about Faneuil's phone calls with Stewart and her co-defendant, former broker Peter Bacanovic, on Dec. 27, 2001 — the day she sold ImClone stock.

They also asked to see charts detailing the phone calls of Stewart, Bacanovic, Faneuil and ImClone founder Samuel Waksal on that day.

The panel of eight women and four men had retired to a jury room at about 11:40 a.m. EST, after 90 minutes of instructions from the judge on the legal requirements the government must meet for a conviction.

"You will now decide where the truth lies," U.S. District Judge Miriam Goldman Cedarbaum told the panel.

CBSNews.com Legal Analyst Andrew Cohen reports the judge made it clear that the jurors cannot infer anything from the fact that neither Stewart nor Bacanovic testified.

The combined charges against Stewart carry a penalty of up to 20 years in prison. If convicted on any charge, she also would be required to step down as chief creative officer of her media company, Martha Stewart Living Omnimedia.

"You are to discharge this final duty with complete fairness and impartiality," the judge said. "You must have no bias or prejudice for or against the government or the defendants."

Cedarbaum dismissed six alternate jurors who had heard the entire case but instructed them not to talk about the trial in case they are called back to replace a juror who cannot continue.

Almost immediately, the 12 jurors sent the judge their first note — a request to have lunch with the six excused alternates. The judge allowed the group lunch but urged jurors not to deliberate over their meal.

Stewart and Bacanovic are accused of lying to investigators about why Stewart sold 3,928 shares of ImClone Systems stock just before it plunged on a negative government report.

The pair claim they had struck a deal before Dec. 27, 2001, to get rid of Stewart's shares when the stock fell to $60. The supposed agreement is the cornerstone of the defense.

The prosecution's closing arguments were delivered in a controlled, quiet manner. Stewart's more flamboyant attorney, Robert Morvillo, seemed to have jurors captivated, even chuckling at times, as he argued Stewart wouldn't risk an empire she built from the ground up to cover for her stockbroker, reports CBS News Correspondent Sharyn Alfonsi.

"Martha Stewart's life is in your hands," Morvillo told the jury "I ask you to let her return to her life and improving the quality of life for all of us. If you do that," he said, echoing Stewart's well known slogan "It's a good thing."

Stewart's lawyer has conceded Stewart was told on Dec. 27 that Waksal was trying to sell his shares. But he insists Stewart was being accurate when she told investigators in 2002 that she did not recall such a tip.

Stewart is charged with conspiracy, obstruction of justice and two counts of making false statements.

Bacanovic is charged with one count of making false statements, making and using false documents, conspiracy, perjury and obstruction of justice — charges that carry a prison term of up to 25 years.

Under federal guidelines, the sentence for either defendant could be sharply reduced, even to less than a year, if convicted.

The overlapping conspiracy count accuses Stewart and Bacanovic of working together to devise the $60 agreement as a cover story to mislead investigators.

Much as she has throughout the six-week trial, Stewart sat expressionless at the defendant's table Wednesday, sometimes resting her chin on her hand.

Cedarbaum read to the jury a complex set of instructions on the counts in the indictment. Each count carries three or four specific requirements the government must meet to convict.

For example, Stewart is charged with obstructing the Securities and Exchange Commission, which interviewed her on Feb. 4 and April 10, 2002.

To meet that charge, jurors must find that Stewart knew there was an SEC inquiry, that she knew her interview was related to the inquiry and that she wrongly tried to "influence, obstruct or impede" the investigation.

Earlier in the trial, Cedarbaum dismissed a count of securities fraud that accused Stewart of deceiving Martha Stewart Living Omnimedia investors by insisting she sold because of the $60 agreement.

The company includes magazines, television programs, Web sites and an array of homemaking products. Stewart stepped down as CEO after she was indicted last summer, but she has remained as chief creative officer.

Later Wednesday, with the jury deliberating, the judge was to hear arguments from a coalition of media organizations seeking the release of jurors' names before the verdict is read.