Perjury charges against a government witness are grounds for a reversal of Martha Stewart's conviction on charges of lying about a stock sale, her lawyer argued before a federal appeals court Thursday.

Lawyer Walter Dellinger argued that — although government ink expert Larry Stewart was subsequently acquitted — the charges he had faced should lead to "virtually automatic reversal" of Martha Stewart's conviction.

Dellinger also said it was unfair of the government to play tapes of interviews with co-defendant Peter Bacanovic (search) when Martha Stewart's lawyers had no chance to cross-examine him.

"These errors mattered," Dellinger said. "They went to the heart of the defense."

The government says the conviction is solid, and was based on overwhelming evidence. Legal experts have said it would be a long shot for the appeals court to overturn the verdict.

Before the hearing, the homemaking entrepreneur had entered the Manhattan courthouse through a side entrance, joking with federal marshals as she passed through a metal detector.

She was released from a federal women's prison in Alderson, W.Va., on March 4, after serving five months there. She is now serving five months of home detention and is allowed to work 48 hours a week outside her Westchester County estate.

Stewart was convicted a year ago of obstructing justice and lying to the government about her 2001 sale of nearly 4,000 shares of the biotechnology company ImClone Systems Inc. (IMCL), run by her longtime friend Sam Waksal (search).

Stewart's lawyers said the sale was based on a prearranged agreement with her stockbroker to sell if the stock dropped to $60 per share.