- A federal judge criticized prosecutors in the Martha Stewart trial for waiting too long to give defense attorneys a copy of an FBI report that could damage the government’s case.
Answering defense complaints, U.S. District Judge Miriam Goldman Cedarbaum on Thursday postponed the testimony of Douglas Faneuil, the government’s star witness, for a week – interrupting the prosecution at a key point in the case.
….Faneuil was ready to testify Thursday that he gave Stewart a secret tip from her stockbroker, Peter Bacanovic, that led her to sell nearly 4,000 shares of ImClone Systems stock in 2001, just before it plummeted on bad news.
But late Wednesday, prosecutors faxed to defense lawyers a document that raises doubts about whether the stockbroker ordered that the tip be passed on – and whether Faneuil himself recalls the episode clearly.
The document was an FBI report on an interview that Jeremiah Gutman, Faneuil’s former attorney, gave to federal authorities in January 2003.
An FBI account of the interview says Gutman told investigators that Faneuil had said “he had been instructed by Bacanovic or Waksal to pass information on to Martha Stewart about ImClone,” according to a person who has seen the FBI account and discussed it with The Associated Press on condition of anonymity.
….Yet the judge refused to give Bacanovic’s attorney the remedy he wanted – a mistrial or a dismissal of all charges against the ex-broker.
But the delay in Faneuil’s testimony was a boon to the defense, forcing the government to scramble its schedule of witnesses and running the risk of confusing jurors, one legal expert said.
“While it’s not necessarily fatal, this can be a bit of a crack in the armor,” said Gregory J. Wallance, a former federal prosecutor. “Now the question becomes how much can the defense exploit it.”
….When defense attorneys get around to cross-examining Faneuil, they will likely use the newly disclosed evidence to convince jurors that Faneuil, whom they have repeatedly called a liar, cannot be trusted.
Defense attorneys will use the week to learn more about Gutman, who they say has declined to speak with them, and possibly to try to question Waksal himself, who is in a federal prison in Pennsylvania, about the matter. [AP]
Unless the defense is incompetent, this should cinch the case for Stewart – the goverment’s case was a stretch anyway and now their star witness looks even more vulnerable: reasonable doubt, Stewart wins.