How Long Did Martha Stewart Stay in Jail? Alderson and Probation

Martha Stewart spent five months in jail. She reported to the Alderson Federal Prison Camp in West Virginia on October 8, 2004, and walked out shortly after midnight on March 4, 2005.¹² Her full sentence ran longer than the prison stay itself: five months behind bars, five months of home confinement at her estate in Bedford, New York, two years of probation, and a $30,000 fine.³

The Five Months at Alderson

Alderson is a minimum-security women’s facility on 105 acres in Alderson, West Virginia. It opened in 1927 as the first federal prison camp for women in the country and houses roughly 1,000 inmates in large rooms holding between 26 and 90 people on bunk beds, with no individual cells.⁴

The press nicknamed it “Camp Cupcake” for its tennis courts and outdoor swimming pool. Former inmates have disputed that image, describing a regimented environment with physically demanding work paid at pennies per hour.⁵ Stewart, who was 63, asked for kitchen duty and was given the job of cleaning the offices and bathrooms of prison administrators instead.

She was released a couple of days earlier than her scheduled Sunday date because federal officials routinely let inmates out early when the release day falls on a weekend. She arrived home in Bedford around 2:40 a.m. on March 4, 2005.²

Five Months of Home Confinement

Prison was only the first half. Stewart then served five months of home confinement under strict conditions. She wore an electronic ankle bracelet linked by radio signal to a transmitter inside the house, and leaving the property broke the signal and triggered an automatic alert to the probation department. She could leave for up to 48 hours a week, and only for work, church, doctor appointments, and grocery shopping.²

Her home confinement was originally scheduled to end on August 10, 2005. Federal probation officials extended it by three weeks after reports that she had attended a yoga class, driven an off-road vehicle around her 153-acre estate, and gone book shopping. Her attorney, Walter Dellinger, confirmed the extension in writing, and the confinement ran through August 31, 2005.⁶⁷ Stewart later said the ankle bracelet irritated her skin.⁸

Probation and the SEC Civil Settlement

After home confinement ended, Stewart remained on two years of federal probation under the sentence Judge Miriam Goldman Cedarbaum imposed on July 16, 2004.⁹

A separate civil case brought by the SEC was settled on August 7, 2006, without Stewart admitting or denying the allegations. She agreed to pay roughly $195,081, made up of $45,673 in disgorgement, $12,389 in prejudgment interest, and a $137,019 civil penalty. She also accepted a five-year ban on serving as a director of any public company and a five-year restriction on involvement in financial reporting, auditing, or compliance at her own company.¹⁰¹¹

What She Was Sentenced For

Stewart was not convicted of insider trading. On December 27, 2001, her Merrill Lynch broker, Peter Bacanovic, had his assistant, Douglas Faneuil, pass her word that ImClone CEO Samuel Waksal and his daughter were dumping their shares ahead of an expected FDA rejection of the company’s cancer drug Erbitux. Stewart then sold her 3,928 ImClone shares, avoiding about $51,000 in losses when the stock dropped 16 percent the next day.¹²¹⁰

A federal grand jury indicted her on June 4, 2003, for what came after the trade. She and Bacanovic had told investigators they had a pre-existing agreement to sell if the stock dropped below $60. On March 5, 2004, after a six-week trial, a jury convicted Stewart of conspiracy, obstruction of an agency proceeding, and two counts of making false statements to the SEC, the FBI, and the U.S. Attorney’s Office.¹³¹⁴¹⁵ An original securities fraud charge was dismissed before deliberations when the trial judge ruled there was insufficient evidence that Stewart intended to defraud investors.

The Appeal

Stewart’s sentence stuck. On January 6, 2006, the U.S. Court of Appeals for the Second Circuit affirmed the convictions in a 74-page ruling, finding that “none of the numerous grounds” raised by the defense justified overturning the verdict.¹⁶ The court rejected the argument that references to insider trading at trial had prejudiced the jury, noting that the trial judge had properly instructed jurors not to convict on uncharged crimes. Stewart had earlier asked the district court for an expedited sentence review in light of a Supreme Court ruling on federal sentencing guidelines, and the court declined to change it.¹⁴

1
TIME. Martha Stewart
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CNN. Martha Stewart Released From Prison
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BBC News. Martha Stewart Sentenced to Prison
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Lawrence Journal-World. Stewart Assigned to Alderson
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Talk Poverty. Martha Stewart’s Prison Was No Camp Cupcake
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New York Post. Home Stretched: Post Pic Extends Martha’s House Arrest by 3 Weeks
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CBS News. Martha Will Have to Wait
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Christian Science Monitor. Martha Stewart: Five Months
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Washington Post. Martha Stewart Sentenced to Prison
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SEC. SEC Settlement With Martha Stewart and Peter Bacanovic
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New York Times. Martha Stewart Settles SEC Case
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SEC. SEC Charges Martha Stewart, Broker Peter Bacanovic With Insider Trading
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History. Martha Stewart Indicted
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Justia. United States v. Martha Stewart, 433 F.3d 273
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PBS NewsHour. Martha Stewart Verdict
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NBC News. Appeals Court Upholds Martha Stewart Conviction