The Serious Crime That Landed Martha Stewart In Prison
Martha Stewart became the queen of the domestic realm for decades, beginning with the start of her empire in the late 1970s. After working as a stockbroker on Wall Street, Stewart switched careers after reading Julia Child's cookbook, "Mastering the Art of French Cooking." She began her catering business, which became a huge success, and eventually led to her many popular cookbooks.
Stewart's conglomerate continued to grow and her company Martha Stewart Living Omnimedia, Inc. included the Martha Stewart Living magazine and her own talk show, which she hosted. The company went public in 1999 and was worth $1.8 billion at the time. It seemed as if Stewart's name was everywhere — from magazine stands to Martha Stewart Everyday products sold at Kmart. Unfortunately, in 2002, Stewart's name was plastered all over the news, and this time, it put her entire brand in jeopardy. Behind her success, a shady move put everything in question.
Martha Stewart was accused of insider trading after selling ImClone stock
In 2002, Martha Stewart made shocking headlines when it was reported that she was under investigation for securities fraud. On December 27, 2001, Stewart sold all of her shares of ImClone stock the day before the company's cancer drug was declined by the Food and Drug Administration. Stewart allegedly got a tip-off from her broker, Peter Bacanovic, who was given the info by ImClone founder Samuel D. Waksal.
During the investigation, Stewart and Bacanovic told the SEC that they had agreed upon a plan to sell the stock if it fell under $60. However, there was no record of their conversation but Stewart maintained her innocence. Things came to a head when Bacanovic's assistant, Doug Faneuil, admitted that he had been ordered to repeat Stewart and Bacanovic's claims. The case went to trial and on March 5, 2004, Stewart was found guilty of conspiracy, obstruction, and lying to federal investigators. The domestic mogul was sentenced to five months in prison and five months of house arrest, with two years of probation.
Stewart called her sentencing "shameful" and "an almost fatal circus event of unprecedented proportions," according to Inside Edition. She thanked all the fans that stood by her and adamantly stated, "I'm not afraid. I'm not afraid, whatsoever." True to her word, Stewart didn't let her prison stint deter her and went on to make one of the biggest comebacks in history.
Martha Stewart landed a television deal while still in prison
Martha Stewart has proven that being a convict is not enough to keep her from rebuilding her brand. Although she lost her show, "Martha Stewart Living," ahead of her prison stint, she was able to score her own spinoff show called "The Apprentice: Martha Stewart," while still incarcerated. NBC producer Mark Burnett and original "Apprentice" star Donald Trump weren't deterred by Stewart's conviction and even went so far as to call her a "brave woman," according to The Baltimore Sun. "She's going to come out and get back to work and be Martha," Burnett stated a month before her release. Stewart also replaced her talk show "Martha Stewart Living" with "The Martha Stewart Show," also for NBC. The program was a success and aired from 2005 to 2012.
Stewart reflected on her prison time in a 2021 interview with Harper's Bazaar. "I knew I was strong going in and I was certainly stronger coming out. It was a very serious happening in my life. I take it very seriously. I'm not bitter about it, but ... My daughter knows all the problems that resulted because of that. There's a lot." Still, there was one upside to her five-month stint. Stewart joked that it gave her "street cred" and according to her empire, she seems to be doing just fine.