Martha Stewart Sentenced To Prison

Punishment Postponed As She Appeals Verdict

NEW YORK, July 16 -- Martha Stewart was sentenced Friday to five months in prison for obstructing a federal securities investigation, then marched outside the courthouse to declare that "a small personal matter" had been blown out of proportion and urge supporters to stick with her company's products.

The multimillionaire businesswoman, who must also serve five months in home confinement and two years under supervision by the probation office, got the lightest sentence possible under federal guidelines. Her former broker Peter E. Bacanovic, who was convicted with her in March of obstruction of justice, conspiracy and lying to federal investigators, received the same terms of confinement in a separate proceeding later in the day. Stewart must pay a $30,000 fine and Bacanovic $4,000.

U.S. District Judge Miriam Goldman Cedarbaum said both Stewart, 62, and Bacanovic, 42, can remain free on bond while they appeal their convictions, which could take more than a year.

The share price of Martha Stewart Living Omnimedia Inc. shot up 37 percent on Friday's news, but remains well below where it was before the news broke that Stewart's December 2001 sale of ImClone Systems Inc. stock was under investigation.

Stewart, who built a catering business into a multimedia empire, was a study in contrasts as she broke two years of nearly total silence about the scandal.

In the courtroom, Stewart told the judge in a shaking voice: "Today is a shameful day. It is shameful for me, for my family, and for my beloved company and all of its employees and partners. What was a small personal matter became over the last 2 1/2 years an almost fatal circus event of unprecedented proportions spreading like oil over a vast landscape. . . . I have been choked and almost suffocated to death."

She then asked the judge to "remember all the good that I have done, all the contributions I have made. . . . My hopes that my life will not be completely destroyed lie entirely in your competent and experienced and merciful hands."

But after exiting the courthouse to cheers of "We love you Martha" from two dozen supporters, Stewart took a far more defiant tone, as she repeated much of the statement she made to the judge.

Saying more than 200 people lost jobs at her company "as a result of this situation," Stewart said, " I want them to know how very, very sorry I am for them and their families."

She thanked the 170,000 people who she said have written to her personal defense Web site and urged them to help the company by subscribing to her magazines, lobbying the advertisers and buying her products.