NEW YORK – The former brokerage assistant who was the government’s star witness against Martha Stewart was let off with a $2,000 fine Friday for initially taking a payoff to lie about the stock deal that got Stewart in trouble.
Douglas Faneuil, 28, apologized in court for trying at first to protect Stewart, as well as his boss, who he said promised him a week’s vacation and a trip to Argentina. His commission rate was also increased, according to court papers.
His voice quavering, Faneuil told U.S. District Judge Miriam Goldman Cedarbaum that he had feared his testimony would not prevail “against rich and powerful people. I was wrong, and for that I am immensely grateful.”
Faneuil, who pleaded guilty to a misdemeanor charge of accepting a payoff, could have gotten six months in prison under sentencing guidelines. But federal prosecutors recommended no jail time after his testimony helped them secure a conviction of the homemaking entrepreneur.
Stewart was sentenced last week to five months in prison and five months home detention for lying to authorities. Peter Bacanovic, her stockbroker and Faneuil’s boss, was also convicted and received the same sentence.
Prosecutors, in a letter to the judge, called Faneuil’s testimony “clear and powerful,” and praised him for coming forward even though “he had no reason whatsoever to believe his lies would ever be uncovered.”
Prosecutors alleged that in 2001, Bacanovic ordered Faneuil to tip Stewart that her friend Sam Waksal was dumping shares of his biotechnology company, ImClone Systems. Waksal had advance word of a negative government report on an ImClone cancer drug.
Stewart and Bacanovic maintained that she sold because they had a standing agreement to unload the stock when it fell to $60 – a claim Faneuil backed at first, before pleading guilty.
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