Stewart Case Goes To Jury

Martha Stewart enters Manhattan federal court, Tuesday, March, 2, 2004, in New York. Closing arguements continue today in her conspiracy and obstruction of justice trial.
AP
Martha Stewart's lawyer implored the jury in closing arguments at her stock-fraud trial Tuesday to let her "return to her life and improving the quality of life for all of us."

"If you do that," Robert Morvillo said, echoing the homemaking expert's slogan, "it's a good thing."

Morvillo insisted Stewart had a standing agreement with her broker to sell her ImClone Systems stock and was telling the truth when she told investigators she did not recall being tipped off that Imclone founder Sam Waksal was trying to dump his holdings.

"Martha Stewart's life is in your hands," Morvillo told the federal jury. "I ask you to let her return to her life, and improving the quality of life for all of us."

CBS News Legal Analyst Andrew Cohen, who has monitored the trial, gave high marks to Morvillo.

"Robert Morvillo presented as fine a summation as I've seen in years. He reportedly charges $650 an hour, and for my money he is worth every penny Stewart has paid him to defend,'' said Cohen.

Lawyers on both sides concluded their closing arguments, and jurors were expected to begin deliberating on Wednesday.

Earlier Tuesday, Morvillo tried to turn to his advantage a key part of prosecutors' case — that Stewart and her co-defendant, broker Peter Bacanovic, told inconsistent stories about the supposed plan to sell her ImClone stock.

"The government is accusing Martha Stewart of participating in a confederacy of dunces," he said. "Nobody could have done what Martha Stewart and Peter Bacanovic are alleged to have done and done it in a dumber fashion."

In a brief rebuttal, prosecutor Karen Patton Seymour challenged Morvillo's suggestion that the alleged conspiracy was too stupid to be true.

"Smart people make mistakes, and smart people do dumb things," she said. "The fact that this wasn't all tied up and perfect doesn't mean that it didn't happen."

Stewart and Bacanovic gave investigators different times for when they decided they would sell her ImClone shares when the price fell to $60. Stewart placed the conversation in October or November 2001, Bacanovic in late December.

"What you have here is the conspirators forgetting to tell each other the crucial element of the conspiracy — when did it take place?" Morvillo said.

Stewart faces four federal counts and Bacanovic five related to the sale of about $225,000 worth of ImClone stock on Dec. 27, 2001, the day before the stock plummeted on news that the government declined to review the firm's cancer drug. Prosecutors say Stewart was tipped off by her broker that Waksal was selling.

Waksal later admitted selling his stock based on advance word of the Food and Drug Administration decision. He is serving a seven-year prison sentence for insider trading.

After U.S. District Judge Miriam Goldman Cedarbaum dismissed the top count against Stewart, securities fraud, last week, jurors were left with charges of conspiracy, obstruction of justice and lying to investigators.

The remaining counts against Stewart carry up to 20 years in prison, although federal sentencing guidelines could mean a sentence of just a year or so. The charges against Bacanovic carry 25 years, but the guidelines would similarly reduce his sentence.

While Stewart is not charged with insider trading, the government says she lied to investigators about the sale by concocting a cover story — that they had struck a deal before Dec. 27 to sell Stewart's shares when ImClone stock dropped below $60.

On Monday, prosecutor Michael Schachter called that story "phony," "silly" and "simply an after-the-fact cover story." Schachter cited contradictory statements, an altered phone log and the testimony of Bacanovic's former assistant, Douglas Faneuil.

But Bacanovic's lawyer, Richard Strassberg, attacked Faneuil's credibility for more than two hours Monday, saying Faneuil's deal with the government to avoid prosecution gave him "an incredible motive to lie."

Strassberg also stressed Bacanovic's reputation as a trustworthy, meticulous broker and said Bacanovic never would have risked his career for the Stewart trade, which earned him just $450 in commissions. Taking such a risk "makes no sense," Strassberg said.