Perjury Charge For Martha Witness

Federal authorities charged a government witness against Martha Stewart with perjury on Friday, accusing him of giving false testimony in the domestic entrepreneur's obstruction of justice trial.

Prosecutors said they had discovered false statements made on the stand by Larry F. Stewart, a national ink expert who works at the Secret Service. Larry Stewart, who is not related to Martha Stewart, testified at the trial about a worksheet prepared by her broker, Peter Bacanovic.

"We are quite confident that the false testimony will have no impact on the convictions of Martha Stewart and Peter Bacanovic, for both factual and legal reasons," Manhattan U.S. Attorney David Kelley said.

Martha Stewart was convicted March 5 for lying about why she sold 3,928 shares of ImClone Systems Inc. in 2001, just before the stock price plunged. She is scheduled to be sentenced June 17, and faces 10 to 16 months in prison.

Bacanovic was cleared on the only charge related to the worksheet — a charge that he added an "at 60" notation to support a cover story for why Martha Stewart sold the stock.

Larry Stewart's testimony was intended to show that the "at 60" ink was different from ink Bacanovic used on other marks on the worksheet, reports CBS News Correspondent Lou Miliano.

The government said it had uncovered eight separate false statements made by Larry Stewart on the stand about two subjects: that he participated in an August 2002 examination of the worksheet, and that he was not familiar with a book proposal on ink analysis.

CBS News Legal Analyst Andrew Cohen said the development is embarassing for prosecutors, but not fatal to their case against Stewart.

"This almost certainly will not have an impact on Martha Stewart's fate, either as far as sentencing goes or as far as getting a new trial," Cohen said.

"It takes a truly monumental twist in a case to generate a new trial and this isn't nearly monumental enough. The ink testimony was relevant only to the case against Martha Stewart's stockbroker and he was acquitted of that particular charge. So this is embarrassing, but not fatal to prosecutors," he adds.

Larry Stewart surrendered to federal agents earlier in the day and was expected to appear in court later Friday.

The two perjury counts against Larry Stewart, 46, of Bethesda, Md., carry up to 10 years in prison.

Stewart has been placed on suspension by the Secret Service, Kelley said.

Shares in Martha Stewart Living Omnimedia Inc. jumped 11 percent Friday afternoon, rising 90 cents to $9.45 in trading on the New York Stock Exchange.

With its star facing a possible prison sentence, the "Martha Stewart Living" television show announced earlier this week it will be put on hiatus after the current season winds up, the show's producers announced Tuesday.

Martha Stewart Living Omnimedia Inc. also announced related staff cuts within the television business segment, and said it will post a restructuring charge of up to $2 million in the second quarter.

Production of the award-winning syndicated television show, distributed by King World Productions, will continue for the remainder of the 11th season, through September.