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Bacanovic at heart of Stewart appeal
Attorneys plan to argue her 6th Amendment right to confront her former broker was violated: sources.
October 19, 2004: 3:12 PM EDT

NEW YORK (CNN) - Attorneys for Martha Stewart plan to argue her Sixth Amendment right to confront a witness was violated during her trial, according to people with knowledge of a legal brief to be filed with the Court of Appeals Wednesday.

Martha Stewart is now serving her five-month prison sentence  in a West Virginia prison.  
Martha Stewart is now serving her five-month prison sentence in a West Virginia prison.

Stewart's defense team was unable to cross-examine her former stockbroker after a damaging audiotape interview with him was played during the trial because he never took the witness stand.

Stewart's lawyers will point to a Supreme Court decision three days after her conviction that ruled against the use of tape-recorded statements from a witness the accused could not cross-examine, sources said.

The argument is "most compelling," said a person familiar with the legal brief. "It's a very good issue."

Stewart is serving a five-month sentence at the Federal Prison Camp in Alderson, West Virginia, after having waived her right to remain free as lawyers appeal her conviction.

Stewart was found guilty of obstruction of justice, conspiracy and making false statements to federal agents investigating her sale of stock in biotechnology company ImClone Systems (Research).

During Martha Stewart's trial, prosecutors played a tape recording of a government interview with Stewart's former stock broker and co-defendant Peter Bacanovic, which undercut testimony from business manager Heidi DeLuca.

DeLuca testified there had been an agreement between Stewart and Bacanovic to sell ImClone stock if the shares fell to "some sort of a bottom price, around 60 or 61."

Prosecutors played a tape of Bacanovic saying he never talked to DeLuca about any agreement to sell Stewart's ImClone stock. The government charged Stewart sold her stock after learning through her broker that ImClone Chief Executive Sam Waksal was trying to dump his shares.

Under the Sixth Amendment, "In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the state and district wherein the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the assistance of counsel for his defense."

In Crawford vs. Washington, the U.S. Supreme Court ruled a tape recording of Sylvia Crawford could not be used to convict her husband Michael of attempting to murder a man who allegedly tried to rape Sylvia because she did not testify at trial, and thus Mr. Crawford could not confront the witness.

Justice Antonin Scalia wrote the confrontation clause of the Sixth Amendment requires "that reliability be assessed in a particular manner: by testing in the crucible of cross-examination."

Similarly, Martha Stewart's attorneys intend to argue she was denied the right to cross-examine Peter Bacanovic because he never took the stand at trial.

Stewart's appellate brief, which runs more than 80 pages, will also detail other complaints about the prosecution, the sources said:

  • The government charged its own ink expert, Larry Stewart, with perjury in his testimony against Martha Stewart;
  • Juror Chappelle Hartridge appeared to have lied and withheld information about his background on his jury questionnaire;
  • Stewart's defense team was never permitted to tell the jury Stewart had not been charged with illegal insider trading, even though the prosecution repeatedly told the jury she had been the recipient of a "secret tip."

Martha Stewart
Peter Bacanovic
ImClone Systems Incorporated

The U.S. Attorney's office in Manhattan, which prosecuted the case, had no comment.

Prosecutors are scheduled to file their response to the Court of Appeals by November 19. Attorneys in the case expect arguments before the court early next year.

For CNN/Money's Special Report: The verdict on Martha, click here.  Top of page

-- from CNNfn's Allan Chernoff

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