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Last Updated: Friday, 21 May, 2004, 20:29 GMT 21:29 UK
Stewart retrial hopes are revived
Martha Stewart
Martha Stewart built an empire on recipes and decorating tips
Lifestyle trendsetter Martha Stewart could be granted a retrial after doubt was cast by US prosecutors over key evidence linked to her conviction.

Secret service laboratory director Larry Stewart, no relation to Martha, has been charged with two counts of perjury over his testimony against her.

He was called as an expert witness about the ink on a broker's worksheet relating to Stewart's share deal.

She is due to be sentenced next month for lying about the stock sale.

Retrial hopes

The TV celebrity was convicted of two counts of making false statements, one of obstructing justice and one of conspiracy and faces a possible jail sentence of more than one year.

By selling shares in bio-tech firm ImClone before they dropped in price, the woman famous in the US for style tips, saved herself a few thousand dollars only to be caught out lying about it.

The stock sale went through one day before damaging information was released about a drug trial of ImClone's key cancer drug Erbitux.

A jury convicted Martha Stewart and her broker Peter Bacanovic on 5 March of trying to thwart a government probe into the sale.

But the latest twist in the tale suggests that US government employee Larry Stewart lied under oath about the extent of his involvement in the forensic examinations of the worksheet document.

Mr Stewart said he was involved in the original examination of the worksheet, but, in reality, he was only involved in a later examination of the paperwork, US prosecutors claim.

Shares rally

News of Mr Stewart's arrest sent shares in Martha Stewart Living Omnimedia up as much as 20%.

However, prosecutors later said the convictions of Stewart and Bacanovic should stand.

"The discovery that Mr Stewart testified falsely in no way compromises the guilty verdicts returned against either defendant, " said US attorney David Kelly.

But other legal experts have their doubts.

"She may well be entitled to a new trial if the judge found that some perjured testimony could have contributed to the guilty verdict against her," said David Howard, a partner at law firm Dechert.

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