She was the CEO of her own multi-million dollar empire who was now facing felony time at Alderson Federal Penitentiary for what amounted to pocket change for Ms. Stewart. How could things have gone so wrong for Martha? Could her attorneys have done something to present a more strategic defense for her case in an effort to minimize her sentence? Martha's case was a classic white-collar crime, and her troubles began shortly after selling ImClone stock based on insider information, a crime known as insider trading. She was contacted by the FBI and US Attorneys in January 2002 and scheduled an interview with them for the first week in February This was the first of several legal errors made in Martha's case. Martha, absent an attorney, ended up lying to the investigators during her initial interview
A good defense would have been to exercise her right to remain silent. (Bennett, 2006). Defense attorneys familiar with white-collar crime all generally agree that cooperating with the authorities is not a good thing. The most common legal advice is, "not to give statements or otherwise cooperate with investigators until you’ve talked with an attorney" (Bennett, 2006). The most common defenses against financial crime are insanity, intoxication, incapacity, and duress. Most of her contemporary white-collar criminals say simply they were out of the loop and just did not know. This is known as the "Absence of Intent" defense which Enron, WorldCom, and others have popularized in the recent months. Entrapment is another common defense used in white-collar cases. The defendant claims they could not have committed the crime without the aid of the investigators. This defense is most often used after lengthy undercover investigations and would not have been usable in Stewart's case.
Martha's initial error of lying without legal counsel was compounded by her attorney's failure to reach a plea agreement and allowing the case to go to trial. As many as 87% of federal fraud cases are settled with plea agreements and there is a sound legal reason for it. Sentencing can be negotiated during a plea agreement, but a judge is under strict restrictions and has to conform to federal guidelines when imposing punishment after a guilty verdict in a trial (France, 2004). The issue of Martha not testifying in her own behalf has also been criticized, though when a defendant takes the stand in a white collar case the defense runs the risk of the jury forgetting that the government has to prove its case beyond a reasonable doubt (France, 2004). The jury found Ms. Stewart guilty of lying to investigators and she received a sentence of 5 months in prison and 5 months on home detention. This was at the minimum end of the federal guidelines and below the national average of 15.7 months prison time (US Sentencing Commission, 2003).
The simple sale of a stock for what amounted to a few dollars drastically altered Martha's world. In a statement shortly after her release she commented, "The experience of the last five months ... has been life altering and life affirming" (Porteus, 2005). However, the damage that the trial did to Martha's image will be long lasting and costly. As a convicted felon, there will be restrictions placed on her ability to operate in certain financial positions. She has been denied entry into Canada and the conviction has scarred her status as a product spokesperson. The price of Martha Stewart stock took an initial beating and after 4 years has just returned to the level it was before the indictment. With the incident behind her, Martha has moved on with some new television programming, a successful talk and domestic show, and "Living". It just goes to prove that it's hard to keep a good thing down.