Martha Stewart gets 5 months in prison

Friday, July 16th 2004, 6:20 am

By: News On 6

NEW YORK (AP) _ Domestic icon Martha Stewart was sentenced Friday to five months in prison for a stock-trading scandal, moving one step closer to a drastically different lifestyle behind bars for the millionaire entrepreneur.

``I'll be back,'' she promised afterward, speaking in a strong voice on the courthouse steps. ``I'm not afraid. Not afraid whatsoever. I'm very sorry it had to come to this.''

Stewart also was ordered to serve five months of home confinement for lying to federal investigators. Stewart, who was also fined $30,000, was spared an immediate trip to federal prison when U.S. District Court Judge Miriam Goldman Cedarbaum stayed her sentence pending appeal.

In the courtroom, her voice was shaky as she appealed for a reduced sentence, asking the judge to ``remember all the good I have done.''

``Today is a shameful day. It's shameful for me, for my family and for my company,'' she said.

But outside the courthouse, Stewart was far more forceful and confident, complaining that a ``small personal matter'' was blown out of proportion and promising that she would not go quietly.

The sentence was at the bottom of the confinement range for Stewart, who was expected to receive 10 to 16 months.

Cedarbaum rejected a defense request to send to Stewart to a halfway house for the first five months, noting that ``lying to government agencies during the course of an investigation is a very serious matter.''

Earlier, Stewart, 62, dressed simply in a black pantsuit, showed no emotion as she strode briskly through a media horde. Supporters applauded and one shouted, ``Hold your head high, Martha!''

The jail term was the latest blow for Stewart, once the CEO of a $1 billion media empire. After her 2003 indictment, she resigned as head of Martha Stewart Living Omnimedia Inc. And following her conviction, she surrendered her seat on its board.

Shares of Martha Stewart Living Omnimedia, which have lost half their value in the two years since the scandal began, surged $2.61, or more than 30 percent, to $11.25 in trading Friday morning on the New York Stock Exchange.

Her fall from grace did little to hurt her standing among Stewart fans. In the final weeks before Stewart's sentencing, hundreds of well-wishers sent letters to the judge asking for mercy.

``I am alone now with my pets,'' a woman named Ruth Ritter wrote to the judge in careful script. ``Just seeing Martha doing her crafts, cooking, gardening, was a great comfort to me.''

Former Merrill Lynch & Co. stockbroker Peter Bacanovic, who was convicted along with Stewart of lying about the 2001 stock sale, was scheduled to be sentenced later Friday.

It was Dec. 27, 2001, when Stewart, in a brief phone call from a Texas tarmac on her way to a Mexican vacation, sold 3,928 shares of ImClone Systems Inc., a company run by her longtime friend Sam Waksal.

Prosecutors alleged that Bacanovic, 42, ordered his assistant to tip Stewart that Waksal was trying to sell his shares. ImClone announced negative news the next day that sent the stock plunging. Stewart saved $51,000.

Stewart and Bacanovic always maintained she sold because of a preset plan to unload the stock when it fell to $60. ImClone now trades around $80.

The jail term was the latest blow for Stewart, once the CEO of a $1 billion media empire. After her 2003 indictment, she resigned as head of Martha Stewart Living Omnimedia Inc. And following her conviction, she surrendered her seat on its board.