NEW YORK – Martha Stewart (search) built a small catering business into a media empire, becoming one of America's most successful female entrepreneurs by telling people how to entertain, cook and decorate their homes.
But she was brought down by a stock deal that netted her $228,000 — small change for a woman whose company Martha Stewart Living Omnimedia (search) (MSO) went public in the dot-com boom years and was once worth more than a billion dollars.
Stewart, 61, was charged on Wednesday with obstructing a government probe into her sale of shares of ImClone Systems Inc. (IMCLE), a biotech company run by a friend.
In a nine-count indictment, the government charged that Stewart and her former stockbroker, Peter Bacanovic (search), interfered with the investigation into the timing of her ImClone stock sale. She sold nearly 4,000 shares at $58 each the day before ImClone delivered bad news that caused its stock to plummet.
The criminal charges, which could carry penalties of up to 10 years in prison, marked a stunning blow to Stewart, who built a mighty media and retail empire committed to "gracious living" and achieved that unique status in American celebrity of being recognized by just one name, like Oprah, J-Lo or Britney.
Separately, the U.S. Securities and Exchange Commission (search) filed a civil suit charging Stewart with insider trading, and she faces unspecified civil penalties.
Stewart, who arrived at the federal court in Manhattan under an umbrella to keep away the prying lenses of press photographers, said through her attorneys that she was innocent of any wrongdoing.
The indictment represented a new low in the remarkable life of a woman who had resigned from the board of the New York Stock Exchange (search) last October after the scandal broke. She is currently chairman and chief executive of Martha Stewart Living Omnimedia, and her status as a director of the cosmetics company Revlon Inc. was not immediately known.
Using skills such as gardening, cooking, baking and sewing learned from her Polish immigrant family, Stewart became an iron-willed perfectionist with an eye for detail and innovation.
But her steely ambition and her sometimes imperious style have been satirized on TV's Saturday Night Live and were the central theme of a recent made-for-TV movie Martha Inc.: The Martha Stewart Story, in which the domestic style setter was played by Cybill Shepherd.
She was born Martha Kostyra in New Jersey in 1941, one of six children of a schoolteacher and a pharmaceuticals salesman. She worked part-time as a model while she studied art, European history and architectural history at Barnard College (search) in New York.
Perhaps because of the impending indictment, Stewart did not attend her 40th reunion last weekend of the Barnard Class of 1963, which also included choreographer Twyla Tharp (search) and writer Erica Jong (search).
After college, she married Andrew Stewart, a law student, and they had a daughter in 1965. Two years later she became a stockbroker on Wall Street.
When recession swept stock markets in 1973, Stewart left the brokerage and moved with her husband into a Connecticut farmhouse that was later seen in her television programs. The two were later divorced.
Out of the basement she established her own catering business in 1976, and her media empire took its first step with the publication of her book Entertaining in 1982.
After several best-selling books and a PBS television special, Martha Stewart became a spokeswoman for Kmart in 1987.
At first glance, Stewart's elaborate style seemed at odds with the discount retailer. But the deal raised Stewart's profile to new heights. And in Stewart, Kmart found an exclusive and enduring brand that yielded sales of home decorating and kitchen items.
Her agreement withstood the retailer's bankruptcy in January 2002. In the first quarter of 2003, merchandising sales accounted for 17 percent of the company's revenue.
In 1991, she launched Martha Stewart Living Magazine, a trend-setting "nesting" title. Six years later she bought out most of Time Warner's share in the magazine, as well as the company's stake in her books, TV show and syndicated column.
She has since spun her super-homemaker persona into a global media and retail brand empire, with an initial public offering in 1999 that raised $873 million.
Since the emergence of the stock trading issue a year ago, shares in her company have plummeted more than 40 percent and wary advertisers have pulled out from the pages of her flagship magazine as well as her television show.
When asked about the insider trading allegations on CBS' The Early Show in 2002, Stewart predicted she would be "exonerated of any ridiculousness." And after a few brief remarks, she uttered memorably: "I want to focus on my salad."