New York - A close friend of Martha Stewart has provided the last major link in a chain of evidence the US government hopes will convince jurors that she lied about the home decorating magnate's sale of ImClone Systems stock.
Mariana Pasternak, whose friendship with the mogul goes back 20 years, testified Thursday that Stewart confided to her just after she sold the stock that ImClone CEO Sam Waksal had tried to sell his own shares.
Prosecutors claim Stewart lied to investigators on April 10, 2002, when she claimed she never recalled being told the Waksals were selling before she dumped her own ImClone shares on December 27, 2001.
Pasternak said she had the conversation with Stewart on Decemeber 30, 2001, on a terrace at a lush resort in Los Cabos, Mexico, where they were vacationing.
"I remember Martha saying Sam was walking funny at the Christmas party, that he was selling or trying to sell his stock, that his daughter was selling or trying to sell her stock," Pasternak testified.
She said Stewart added: "Isn't it nice to have brokers who tell you those things?"
ImClone shares tumbled shortly after Stewart sold her shares on news that the Food and Drug Administration would not review ImClone's application for approval of its highly touted cancer drug, Erbitux.
While Stewart is not charged with knowing about the drug review, she told investigators in 2002 she did not recall being told anything about Waksal trying to sell.
Waksal, a friend of both Stewart and Pasternak, is serving a seven-year prison sentence for insider trading. He and his family frantically sold, or tried to sell, their shares ahead of the drug announcement.
Stewart and her broker Peter Bacanovic, who is also on trial, claim they had made a deal earlier in December 2001 to dump Stewart's ImClone shares if the stock fell below $60. Prosecutors say that was a cover story.
The government was expected to rest against case against the pair early Friday. Pasternak, one of the final government witnesses, added to the already damaging testimony against Stewart at the trial.
Douglas Faneuil, a young former Merrill Lynch & Company assistant, has testified Bacanovic ordered him on December 27, 2001, to alert Stewart that the Waksals were trying to sell - then pressured him to cover it up.
And Ann Armstrong, a personal assistant to Stewart, testified Stewart herself altered a computer log of a message Bacanovic left on the same day, then quickly ordered her to change it back.
The government has also laid out differences in the stories Bacanovic and Stewart told federal investigators. Stewart, for example, initially claimed she spoke to Bacanovic on December 27, rather than his assistant.
Earlier Thursday, a Secret Service forensics expert testified a notation of "(at)60" on a worksheet Bacanovic used to track Stewart's portfolio had been made in a different ink than other marks on the sheet.
Larry Stewart, considered the nation's top ink expert, said infrared and ultraviolet light tests had confirmed differences between the "(at)60" entry and other marks.
"The '(at)60' entry is a different ink than the remaining entries on the document," said the forensic scientist, who is no relation to Martha Stewart.
The worksheet, among the most critical pieces of government evidence in the trial, is a summary of gains and losses in 36
stocks Stewart owned in late 2001 at Merrill Lynch & Co.
Bacanovic made circles, check marks and other notations in blue ink on the document. The "(at)60" mark, also in blue ink, is underlined and appears next to an entry for Stewart's 3 928 shares of ImClone.
Under cross-examination, the ink expert said it was impossible to tell how many pens had been used to mark on the document. Bacanovic's team contends he simply used different pens in his work. - Sapa-AP