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Martha and her Tasteful Orange Jumpsuit

Last week, domestic diva Martha Stewart was sentenced to five months in prison, plus five months’ home confinement, plus a fine of $30,000, for lying to Federal authorities about her sale of ImClone stock. Stewart has vowed to appeal her conviction, but I haven’t found a single independent legal commentator who thinks she has a credible shot at winning. Judge Cederbaum has allowed her to remain at large until the appeal is concluded, for while her chances may be slim, the appeal would be essentially meaningless if she were forced to serve her full sentence before it is heard.

Stewart is not a very sympathetic figure. After her sentence was handed down, she gave an interview in which she compared herself to Nelson Mandela. Given that Mandela was imprisoned for twenty-seven years on trumped-up political charges, it is hard to see how anybody could find such a comparison even remotely appropriate. Stewart also continues to insist that her case was “a small personal matter.” I have a feeling that Judge Cederbaum might have been a tad less generous had these comments been made before the sentencing.

At the same time, while I am repulsed by Stewart’s arrogance and lack of contrition, I think Cederbaum’s sentence — the minimum allowed by law — was appropriate. Stewart was convicted of violating 18 U.S.C Section 1001, which provides:

(a) Except as otherwise provided in this section, whoever, in any matter within the jurisdiction of the executive, legislative, or judicial branch of the Government of the United States, knowingly and willfully - (1) falsifies, conceals, or covers up by any trick, scheme, or device a material fact; (2) makes any materially false, fictitious, or fraudulent statement or representation; or (3) makes or uses any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry; shall be fined under this title or imprisoned not more than 5 years, or both.

This section of the United States Code was originally designed to punish liars who obstruct Federal investigations. But increasingly, the government uses Section 1001 to manufacture crimes when they know the defendant did something wrong, but they don’t exactly have a case they can put to a jury.

If you’re a prosecutor or FBI agent, the formula is simple enough. Just get the suspect to lie about a question to which the government already knows the answer. The suspect can then be prosecuted for that lie, even though the underlying offense can’t be proven beyond a reasonable doubt.

If the government asks the right questions, prosecutors can manufacture as many counts of lying as they want. The suspect doesn’t need to be under oath, and the interviewer doesn’t even need to keep accurate notes of precisely what was said. And remember, each lie carries a sentence up to five years in prison. Without much trouble, the government can easily rack up an indictment that threatens decades in prison, without even charging the underlying crime that they were originally investigating.

This is precisely what happened in Stewart’s case. The government eventually concluded that it could not prove the underlying offense — insider trading — beyond a reasonble doubt. But they did catch her lying, and those lies could be prosecuted as independent offenses. (The government also alleged other “collateral crimes,” of which Stewart was not convicted.)

Now, I don’t have any sympathy for Stewart’s lies. The government did not entrap her. While the law does not require the government to tell the people they interview that lying is a crime, Stewart was certainly sophisticated enough to know this without being told. There is also ample evidence that she did lie. But in the grand scheme, her lies were victimless, as the government already knew the answers to the questions it was asking.

In context, therefore, I think that Stewart truly deserved to be sentenced at the lower end of the Federal guideline range, which is precisely what Judge Cederbaum did. Even five months in the Federal pen will be a harrowing experience for Stewart, who has also seen her personal wealth and reputation dramatically reduced as a result of this affair. Her well-publicized fall from grace offers a sufficient deterrent to others who may find themselves faced with a Federal investigation. You can always take the Fifth, but if you submit to questions, your answers had better be true.

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