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The alleged perjury by a government expert witness does not justify a new trial for Martha Stewart and Peter Bacanovic, a federal judge ruled Thursday. Citing the “overwhelming independent evidence” supporting guilty verdicts for Ms. Stewart and Bacanovic at their obstruction trial in March, Southern District Judge Miriam Goldman Cedarbaum said “there is no reasonable likelihood that this perjury could have affected” the jury’s decision. The ruling on the alleged lies by government ink expert Lawrence Stewart sets the stage for a July 16 sentencing of the former broker and his famous client. They were convicted of making false statements, conspiracy and obstructing an agency proceeding. Bacanovic will also be sentenced on a single count of perjury. The charges grew out of Ms. Stewart’s 2001 sale of 3,928 shares of stock in ImClone Systems, Inc. Lawyers for Ms. Stewart and Bacanovic contended that the trial was infected by the testimony of Mr. Stewart, who is not related to Ms. Stewart. Mr. Stewart, an ink specialist who until recently was director of the Forensic Services Division of the U.S. Secret Service, was indicted on two counts of perjury on May 21. His testimony at the trial concerned an alleged effort by Bacanovic to change a document so it would support the claim that he and Ms. Stewart had a pre-existing arrangement to sell ImClone if it fell below $60 per share. Prosecutors argued the claim was merely a cover for Ms. Stewart. She actually sold the stock because she learned from Mr. Bacanovic’s assistant that ImClone founder Samuel Waksal was trying to sell large blocks of his family’s shares in the company, the prosecution said. Mr. Stewart testified in support of the government’s argument that Bacanovic had, after the fact, entered the notation “@60″ next to the line for ImClone on a worksheet for stocks owned by Ms. Stewart. Mr. Stewart’s indictment charged that he lied when he claimed to have personally participated in the tests of the worksheet and that he lied when he claimed he had seen a textbook proposal drafted by his colleagues. The indictment led defense attorneys Robert Morvillo and John J. Teague Jr. for Ms. Stewart and Richard Strassberg and David J. Apfel for Bacanovic to move for a new trial based on newly discovered evidence. The lawyers also argued the failure to turn over materials that would have shown Mr. Stewart was committing perjury violated the government’s constitutional disclosure obligations, and, had the defense been supplied these materials, they would have had the opportunity to confront and cross-examine the person who actually tested the ink on the worksheet. But Cedarbaum said that under the standard for granting a new trial under Federal Rule of Criminal Procedure 33, “the mere fact that a witness committed perjury is insufficient, standing alone,” to grant relief. The first step in the inquiry, she said, involved the extent to which prosecutors were aware of the perjury. Where the government is unaware of the perjury, a new trial should be granted only where the testimony was material and the court is convinced that the defendant would not have been convicted but for the perjured testimony, she said. In Cedarbaum’s view, the fact that prosecutors Karen Patton Seymour, Michael Schachter and William A. Burck prepared Mr. Stewart to testify, and the fact that he was a government employee, did not mean that Mr. Stewart was part of the prosecution’s trial “team.” The judge said case law on the issue reveals that “the inquiry into whether knowledge of witness perjury should be imputed to a prosecuting attorney is a highly fact-specific one.” “The question is not whether any expert witness can be treated as an ‘arm of the prosecution,’ but whether Lawrence played such a role,” she said. “The facts of this case demonstrate that he did not.” Moreover, she said, lawyers for Bacanovic and Ms. Stewart “have failed to point to anything” that showed the prosecutors were alerted to the possibility that Mr. Stewart was lying about the testing of the worksheet, or that they were negligent. The alleged perjury also had no effect on the jury’s verdict, she said, because the jury acquitted Mr. Bacanovic on the charge related to the worksheet, making and using a false document. “The outcome would have been no different had Lawrence’s entire testimony been rejected by the jury, or had Lawrence not testified at all,” she said. The defense claimed that Mr. Stewart’s testimony mattered because awareness of Mr. Stewart’s perjury could have made the jury more likely to believe in the existence of the $60 agreement. But the judge said “it would not have been inconsistent for the jury to find that defendants did make the $60 agreement, but that the agreement was not the reason for the sale.” Cedarbaum went on to reject the defendants’ claims that the government violated its disclosure obligations and that they were denied an opportunity to confront the examiner who conducted the ink tests. Morvillo and Teague were joined by Barry A. Bohrer, Rebecca A. Monck and Gregory Morvillo of Morvillo, Abramowitz, Grand, Iason & Silberberg and Walter Dellinger, Jeremy Maltby and Matthew Shors of O’Melveny & Myers in representing Ms. Stewart. Apfel and Strassberg were joined by Cheryl R. Brunetti, Shannon J. Siragusa and Erin N. Jackson of Goodwin Procter in representing Bacanovic.

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