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Ink Expert Portrayed as Victim at Perjury Trial

Affair, Feud Claimed in Case Brought About by Prosecution of Martha Stewart

By Brooke A. Masters
Washington Post Staff Writer
Friday, September 24, 2004; Page E02

NEW YORK, Sept. 23 -- Lawyers for the U.S. Secret Service laboratory director on trial for lying at Martha Stewart's criminal trial portrayed him as the victim of a bitter underling who was angry that she hadn't been called to testify in his stead.

But a federal prosecutor contended that Larry F. Stewart -- who is not related to the millionaire businesswoman -- committed perjury while testifying in February about the ink on a key document in the case. The 47-year-old lab director falsely took credit for the work done by the lower-ranking employee, Susan Fortunato, and falsely claimed to be familiar with another colleague's book proposal "to bolster his standing before the jury," Assistant U.S. Attorney David Esseks said.

_____Martha Stewart Coverage_____
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Stewart to Begin Serving Prison Sentence Oct. 8 (The Washington Post, Sep 22, 2004)
Complete Trial Background

Martha Stewart's former broker Peter E. Bacanovic, who was charged with making false documents, was acquitted on that count, but the two defendants were convicted in March of conspiracy, obstruction and lying to federal investigators about her December 2001 sale of ImClone Systems Inc. stock. Prosecutors charged Larry Stewart with perjury in May.

Opening statements in his trial Thursday offered an unusually personal view of the Secret Service's Washington forensic division, the nation's premier document analysis laboratory. Not only was Larry Stewart romantically involved with another laboratory employee, but he, Fortunato and other top document examiners also were in the habit of discussing their sex lives in graphic detail over lunch, according to a witness and the lawyers. Fortunato had filed, and later withdrawn, a sexual harassment complaint against Stewart in 2001 alleging that he had kissed her during a meeting.

"This case is the final episode in a three-year feud between Larry Stewart and Susan Fortunato," said defense attorney Judith Wheat. "Larry Stewart may have ruffled feathers along the way, but Larry Stewart is not a liar, and Larry Stewart did not commit perjury."

Early testimony in the case was largely a rehash of this winter's high-profile prosecution of the 63-year-old founder of Martha Stewart Living Omnimedia Inc. and her former broker. At that trial, Larry Stewart served as the government's main expert witness.

Describing himself as "the national expert" on ink, he testified then that he had personally tested the ink used to mark up a worksheet that Bacanovic said documented an agreement to sell ImClone if the share price fell below $60. "This is where I first placed an ink," Larry Stewart said at one point, describing the analysis.

Prosecutors used the finding that two inks had been used on the page to argue that the $60 arrangement was a cover story designed to conceal that Bacanovic's assistant had improperly tipped Martha Stewart that ImClone's founder was trying to sell his stock in the company.

But Fortunato, 39, testified Tuesday that she had actually done all the work, with only minimal input or oversight from Larry Stewart. Two months after the Martha Stewart trial ended, Fortunato told her bosses that she believed her supervisor had lied on the stand.

When Larry Stewart was confronted with the discrepancy, "he turned white," Esseks told the jury. "He hesitated; he stammered. He said, 'I want to go home.' "

But Wheat said yesterday that her client, a father of two, "uses the terms 'I,' 'we' and 'the lab' interchangeably," and that Martha Stewart's prosecutors had done the same thing. She also said that Fortunato brought up the alleged perjury only during a larger litany of complaints about Larry Stewart's management and that the government had misunderstood her client's testimony about the colleague's book proposal.

The stakes in this trial are high, and not just for the participants. Larry Stewart has analyzed evidence from hundreds of cases including high-profile matters involving suspected Nazi death-camp guard John Demjanjuk, the Sept. 11, 2001, terrorist attacks and the Washington area snipers. If he is convicted, it could cause ripple effects elsewhere in the criminal justice system.

Lawyers for Martha Stewart and Bacanovic are watching, too. They have said they intend to make the perjury charges against Larry Stewart a key part of their appeal to the U.S. Court of Appeals for the 2nd Circuit. Martha Stewart announced last week that she would serve her five-month prison sentence without waiting until the appeal is heard next year.


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