Inside Martha Stewart's Five Months in Prison: Why She Was Caged, Lies to FBI, 'Horrors' of Jail — and Amazing Career Resurrection
Martha Stewart spent five months in prison after she was found guilty in a 2004 fraud case.
Nov. 4 2024, Published 12:00 p.m. ET
Inside Martha Stewart's Scandalous Past
Martha Stewart became the first female self-made billionaire in the U.S.
Martha Stewart's legal troubles started when she sold her ImClone Systems shares in December 2001. The following year, investigators questioned her and her stockbroker, Peter Bacanovic, over the sale, as authorities thought they received insider info that prompted the move.
What Were the Allegations Against Martha Stewart?
Her media empire, Martha Stewart Living Omnimedia, went public on the New York Stock Exchange in 1999.
The federal indictment soon revealed that assistant Douglas Faneuil informed Bacanovic that ImClone CEO Sam Waksal was selling off the majority of the shares after learning that the FDA planned to reject the company's cancer drug Erbitux.
After receiving instructions from Bacanovic, Faneuil told Stewart: "Peter Bacanovic thinks ImClone is going to start trading downward."
The businesswoman, according to the federal indictment, allegedly tried to erase the text. She immediately requested to sell her 4,000 shares after receiving the tip.
What Happened When Martha Stewart Sold Her ImClone Shares?
Martha Stewart published her first book in 1982.
On December 28, 2001, the FDA confirmed it rejected ImClone's application for the approval of its cancer drug, causing the company's stock to drop 16 percent.
The sale prevented Stewart from suffering more than $45,000 in losses.
Was Martha Stewart Found Guilty in the Case?
CNN miniseries 'The Many Lives of Martha Stewart' explored the ups and downs of her life.
In June 2003, Stewart was slapped with criminal and civil charges related to the fraud case.
James Comey, then-U.S. attorney for the Southern District of New York, said at a news conference per The New York Times: "This criminal case is about lying — lying to the F.B.I., lying to the SEC, lying to investors. Martha Stewart is being prosecuted not for who she is, but because of what she did."
After a six-week trial in 2004, Stewart was found guilty of securities fraud, conspiracy, obstruction, and two counts of lying to federal investigators.
What Was Martha Stewart's Sentence?
'I raise my own turkeys, they have been pardoned this year', the 83-year-old joked.
Stewart was sentenced to five months in prison, five months of home confinement and two years of supervised probation after being found guilty in the fraud case.
After her sentencing, she told everyone outside the courthouse she "will be back", adding: "I'm used to all kinds of hard work, as you know, and I'm not afraid. I'm not afraid whatsoever."
Stewart checked into a federal correctional facility on October 8, 2004, to serve her five-month prison time. Following her release in March 2005, she began her five-month house arrest at her Bedford, N.Y., home.
How Did Martha Stewart Respond to Her Prison Sentence?
Stewart is not planning on having a turkey as her main course on Thanksgiving.
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In a post-release statement on her website, Stewart revealed that her time at the minimum-security federal correctional facility was "life-altering" and "life-affirming".
She continued: "Someday, I hope to have the chance to talk more about all that has happened, the extraordinary people I have met here and all that I have learned."
"Right now, as you can imagine, I am thrilled to be returning to my more familiar life. My heart is filled with joy at the prospect of the warm embraces of my family, friends, and colleagues. Certainly, there is no place like home."
In 2020, she told People she spent her time behind bars enjoying her old and new hobbies, including ceramics and crocheting. However, she also called the experience a terrible one.
Stewart explained: "It was horrifying and no one, no one, should have to go through that kind of indignity really except for murderers, and there are a few other categories, but no one should have to go through that. It's a very, very awful thing. There are lots and lots of disturbing things that go on in an incarceration like that."
What Happened to Martha Stewart's Career After the Scandal?
Martha Stewart welcomed Alexis, her first and only daughter with Andrew Stewart, in 1965.
A few months after completing her sentence, Stewart launched her TV shows The Martha Stewart Show and The Apprentice: Martha Stewart, the latter was a spin-off of Donald Trump's reality show.
From 2012 to 2017, she hosted the PBS cooking show Martha Stewart Cooking School while completing her guest-hosting stint on Chopped. Her other shows include Bakeaway Camp with Martha Stewart, Martha Knows Best, Martha Cooks, Martha Gardens and Martha Holidays.
Over the years, Stewart has also released several books and expanded her business empire.
She told People in 2023: "There's no reason to retire. That's not what my life is about. My life is about doing things and learning things and teaching things."
