Ink Expert in Martha Stewart Trial Pleads Not Guilty

NEW YORK – A government witness pleaded not guilty Wednesday to charges that he lied during testimony in the criminal trial of Martha Stewart (search), the lifestyle trendsetter convicted of conspiracy.

In entering the plea, Larry Stewart, a U.S. Secret Service (search) laboratory director, denied committing perjury at the trial, where he testified as an expert witness about ink on a worksheet kept by Martha Stewart's stockbroker.

Lawyers for Martha Stewart have asked for a new trial, arguing that the verdict against their client was "corroded" by the Secret Service lab director's testimony.

Federal prosecutors have said charges against Larry Stewart, who appeared Wednesday wearing a charcoal suit with an American flag lapel pin, would not affect the convictions of Martha Stewart and her former broker Peter Bacanovic.

Larry Stewart, of Bethesda, Md., who is not related to Martha Stewart, faces two counts of perjury. The charges relate to testimony in February when Larry Stewart said he was involved in examinations of the worksheet. He actually was consulted only briefly and did not do the actual work, court documents said.

He is now due to stand trial on Sept. 20. His lawyer said Wednesday he would file a motion to have the venue moved to Washington, D.C. from New York.

Martha Stewart, 62, who built a media empire on tips for gracious living, was found guilty in March of lying to investigators over a suspicious stock sale and is expected to face time in prison.

She is due to be sentenced next month. Her conviction for conspiracy, making false statements and obstruction was related to her suspicious sale of stock in biotech company ImClone Systems Inc. (IMCL) in December 2001.

Prosecutors said she was tipped off that ImClone's founder, Sam Waksal (search), was dumping his shares. The defense said there was a preexisting deal to sell her shares if the price fell to $60.

The broker's worksheet listed various securities positions held by Martha Stewart and had Bacanovic's handwritten notations, including one to sell ImClone "at 60."

But Martha Stewart's lawyers, in papers filed last week, demanded a new trial, saying "the government's election to call Larry Stewart as a witness and to present his testimony at trial produced error of constitutional dimension in several respects, requiring that the convictions be vacated and a new trial ordered."

U.S. District Judge Miriam Goldman Cedarbaum is due to decide at a later date whether to grand a new trial to Martha Stewart.