Jury Told of Stewart 'lies'

Martha Stewart, America's best known businesswoman, chose to "lie, conceal and cover up" the truth about a suspicious share sale, the jury in her obstruction of justice trial was told during closing arguments yesterday.

Prosecutor Michael Schachter said that Ms Stewart lied to government investigators because "she thought she would never get caught".

He then proceeded to detail a "trail of evidence" that she allegedly left behind, including damaging testimony from her best friend, emails and an apparent attempt to tamper with evidence witnessed by her assistant.

Ms Stewart, along with her co-defendant, a former Merrill Lynch broker, are accused of deliberately misleading authorities about her sale of shares in the drug firm ImClone in late December 2001. Prosecutors allege that Peter Bacanovic im properly passed on a tip that the founder of the company and members of that person's family were trying to unload all of their stock.

When they were summoned to meetings with federal investigators, "Martha Stewart and Peter Bacanovic had two options, tell the truth or decline to be interviewed. They chose an option the law does not allow - to lie, conceal and cover up."

Much of the closing argument, which lasted more than three hours, focused on the credibility of the government's key witness, Mr Bacanovic's former assistant, Douglas Faneuil. Over several days of testimony, Mr Faneuil had told the jury that it was he who had been ordered to pass on the tip to Ms Stewart. "If you believe Douglas Faneuil's testimony this trial is over," Mr Schachter said. "You don't need to hear any more."

The defence, he said, had tried to damage 28-year-old Mr Faneuil's credibility. Mr Schachter said: "Douglas Faneuil's demeanour on that witness stand showed you he tried his level best to tell the truth." Mr Faneuil has admitted to a misdemeanour for initially supporting Ms Stewart and Mr Bacanovic's story and could face a year in prison.

Mr Schachter also ridiculed the stories that Mr Bacanovic and Ms Stewart gave to prove their innocence. Mr Bacanovic's first defence in the days following the sale was that it was a "tax-loss" sale - a method of tidying up Ms Stewart's account to minimise her tax liabilities. It was only later that the alleged agreement to sell the shares when they hit $60 - the cornerstone of the defence - was proffered, Mr Schachter said.