Sun, May 23, 2004 - Page 7 News List

State witness in Stewart trial charged with perjury

REUTERS , NEW YORK

A government witness was charged with lying to help convict lifestyle trendsetter Martha Stewart, officials said on Friday, raising questions of whether her conspiracy conviction could be thrown out.

Larry Stewart, a US Secret Service laboratory director, was accused of committing perjury at her trial, where he testified as an expert witness about ink on a work-sheet kept by her stockbroker, federal prosecutors said.

Prosecutors said the development would not affect the convictions of Martha Stewart and her former broker Peter Bacanovic, but defense attorneys argued otherwise.

The perjury charges related to testimony in February when Larry Stewart said he was involved in examinations of the worksheet. He actually was consulted only briefly and did not do the actual work, court documents said.

Martha Stewart, 62, who built a media empire on tips for gracious living, was found guilty in March of lying to investigators over a suspicious stock sale and is expected to face time in prison.

Larry Stewart, 46, of Bethesda, Maryland, who is not related to Martha Stewart, faces two counts of perjury. He surrendered on Friday at Manhattan federal court and later was released on bond.

"The discovery that Mr. Stewart testified falsely in no way compromises the guilty verdicts returned against either def-endant," Manhattan US Attorney David Kelley said in a letter to US District Judge Miriam Goldman Cedarbaum.

But defense attorneys said the perjury charges, along with earlier questions about a juror, undermine the case.

"The arrest of one of the government's key witnesses for perjury clearly demonstrates that the trial of Martha Stewart was fatally flawed and unfair," lawyers Robert Morvillo and John Tigue said in a statement.

They had previously sought a new trial on grounds that a juror lied on a questionnaire used to select the panel.

The judge denied that motion earlier this month.

Richard Strassberg, Bacanovic's lawyer, added: "We believe that the perjury of a key government witness undermines any integrity there was in the jury's verdict and will require a new trial and we will pursue that."

Christopher Bebel, a former federal prosecutor and Securities and Exchange Commission attorney, questioned how solid the convictions may be.

"The government's verdict is going to be erased and the parties will have to tee it up again because this piece of evidence played too much of a central role in the case," he said.

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