Aug. 24, 2025

"FROM BILLIONAIRE TO INMATE #55170-054: Martha Stewart's Prison Yoga Classes & The $230,000 Lie That Destroyed Everything"

Show Notes
Transcript

Martha Stewart built a billion-dollar empire teaching America how to live perfectly - then destroyed it with one phone call from her private jet. Reid Carter reveals how a $230,000 stock sale led to federal prison, why Martha carried $10,000 Hermès bags to court, and how she became "M. Diddy" teaching yoga to drug dealers in Camp Cupcake. The domestic goddess traded Egyptian cotton for a plastic mattress, worked for 12 cents an hour, and left prison wearing a poncho crocheted by a fellow inmate. This is the incredible story of the lie that cost everything and the comeback that made her stronger.

Join the Celebrity Trials community on social media! We're building a passionate group of true crime enthusiasts who love diving deep into the most shocking cases in America.

Follow us on Facebook and Instagram by searching "Celebrity Trials Podcast" on either platform. You'll get exclusive behind-the-scenes content, breaking news updates on cases we're covering, and early alerts when new episodes drop. Our social media is where Reid Carter's hottest takes live, including reactions that don't make it into the show.

But more importantly, it's where YOU come in. Share your theories, debate the verdicts, and connect with fellow listeners who are just as obsessed with justice as you are. Did the jury get it right? What questions do you still have? Your comments and insights often shape future episodes.

We cover the trials that matter, but our community makes the conversation unforgettable. Come for Reid's signature cynical commentary, stay for the incredible discussions with thousands of true crime fans who get it.

Join the Celebrity Trials community on social media! We're building a passionate group of true crime enthusiasts who love diving deep into the most shocking cases in America.

Follow us on Facebook and Instagram by searching "Celebrity Trials Podcast" on either platform. You'll get exclusive behind-the-scenes content, breaking news updates on cases we're covering, and early alerts when new episodes drop. Our social media is where Reid Carter's hottest takes live, including reactions that don't make it into the show.

But more importantly, it's where YOU come in. Share your theories, debate the verdicts, and connect with fellow listeners who are just as obsessed with justice as you are. Did the jury get it right? What questions do you still have? Your comments and insights often shape future episodes.

We cover the trials that matter, but our community makes the conversation unforgettable. Come for Reid's signature cynical commentary, stay for the incredible discussions with thousands of true crime fans who get it.

WEBVTT

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Caalaroga Shark Media.

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Good morning, I'm read Carter.

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Sunday, August twenty fourth, twenty twenty five, we continue our

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weekend journey through celebrity justice with a woman who just

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turned eighty four a few weeks ago. Martha Stewart, the

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Queen of homemaking, the goddess of good living, the billionaire

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who built an empire on perfect dinner parties and color

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coordinated closets. But for five months in two thousand and

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four and two thousand and five, Martha Stewart was Federal

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inmate number five five one seven zero dash zero five

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to four, wearing prison khakis instead of cashmere, teaching yoga

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to fellow inmates, instead of teaching America how to fold

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fitted sheets. Today, we're examining how a stock sale of

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less than two hundred and thirty thousand dollars pocket change

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for a billionaire led to the most famous female federal

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inn mate since Tokyo Rose. How lying about something that

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wasn't even illegal became a federal crime, and how Martha

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Stewart did what Phil Specter couldn't. Admitted her mistake, served

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her time, and came back stronger. This is the difference.

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Between accountability and arrogance, between rehabilitation and dying in denial.

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Let's talk about the fall and rise of Martha Stuart.

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Martha Helen Costeira was born August third, nineteen forty one,

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in Jersey City, New Jersey. She celebrated her eighty fourth

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birthday just three weeks ago. The second of six children

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in a Polish American family, she learned perfection early. Her

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mother taught her cooking, sewing, and gardening. Her father taught

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her that nothing less than excellence was acceptable. By two

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thousand and one, Martha Stewart wasn't just successful, she was

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an institution. Martha Stewart Living Omnimedia was worth over a

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billion dollar. Her magazine reached millions. Her TV show taught

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America how to live beautifully. She was quite literally a

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self made billionaire who built an empire on the radical

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idea that everyday life should be elegant. Then came December

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twenty seventh, two thousand and one. Here's what happened. Martha's friend,

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Sam Waxall was the CEO of im Clone, a biotech

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company developing a cancer drug called erbatux. On December twenty

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sixth Wauksall learned the FDA was about to reject the drug.

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The news wasn't public yet, but when it broke, m

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Clone stock would tank. Waxall did what criminals do. He

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tried to dump his stock before the news broke. He

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called his daughter, he called his father, they all started selling.

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Martha's broker at Merrill Lynch was Peter Bikanovitch. His assistant

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was a young man named Douglas Fanuel. When Fanuel saw

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the Waksall family dumping im Clone stock, Bikanovitch told him

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to call Martha. Martha was on her way to a

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vacation in Mexico. She got the call, heard that the

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wax Salls were selling, and ordered her three thousand, nine

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hundred twenty eight shares sold immediately. She made two hundred

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twenty nine thousand dollars on the sale. The next day,

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the FDA rejection became public and m Clone stock crashed.

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Now here's the important part, and listen carefully, because this

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is where Martha Stewart destroyed her life. Insider trading is illegal,

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but Martha Stewart was never convicted of insider trading. She

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was never even charged with insider trading the government couldn't

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prove she had true inside information. What they could prove

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was that she lied about it. When the FBI and

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SEC came calling in two thousand and two, Martha could

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have said, my broker told me the walk salls were selling,

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and I decided to sell too. That might have been unethical,

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but it probably wasn't illegal. She could have paid a

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fine and moved on. Instead, dead Martha Stewart decided to lie.

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She claimed she had a pre existing agreement with Bokanovic

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to sell if the stock dropped below sixty dollars. She

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submitted a phone log to prove she was returning Bikanovich's

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call about this agreement. She had her assistant alter evidence.

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She told federal investigators a story that simply wasn't true,

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and that's what got her, not the stock sale, the

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cover up. On June fourth, two thousand and three, Martha

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was indicted on nine counts, including obstruction of justice and

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lying to federal investigators. She stepped down as CEO of

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her company, but stayed on as chief creative officer. The

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woman who taught America how to do everything perfectly was

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about to learn how imperfect the justice system could be.

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The trial began in January two thousand and four, and

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it was must see TV.

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Every day.

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Martha arrived at the federal courthouse carrying a different hermess handbag,

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the cheapest worth six thousand dollars, one worth over ten

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thousand dollars. The media a counted them, they photographed them,

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They analyzed what message she was sending with each bag.

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Here's what killed her case. Doug Fanuel, the broker's assistant, flipped.

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He testified that Bokanovitch had ordered him to tell Martha

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about the Wauksall's selling. He testified there was no sixty

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dollars stop loss agreement. He testified that Martha's story was

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a lie from beginning to end. The prosecution's case was simple.

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Martha Stewart, who preached honesty and integrity, had lied to

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federal investigators to avoid a scandal. She'd obstructed justice. She'd

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tampered with evidence, all to avoid admitting she'd done something

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that looked bad but might not have even been illegal.

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On March fifth, two thousand and four, after three days

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of deliberation, the jury found Martha Stuart guilty on all counts,

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two counts of making false statements, one count of conspiracy,

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and one count of obstruction of justice. The securities fraud

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charge had been dropped for lack of evidence. The courtroom

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was silent. Martha, who'd been sketching and taking notes throughout

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the trial, showed no emotion. But outside her fans, women

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wearing chef's hats carrying signs saying save Martha, wept openly.

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On July sixteenth, two thousand and four, Judge Miriam Cedarbaum

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sentenced Martha to five months in federal prison, five months

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of home confinement, two years probation, and a thirty thousand

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dollars fine. She could have gotten sixteen years. The judge

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showed mercy. But here's where Martha Stewart separated herself from

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every other convicted celebrity. She didn't wait for appeals, she

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didn't drag it out. On September fifteenth, two thousand and four,

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she held a press conference and announced she would begin

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serving her sentence immediately. I want to get it over with,

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she said, I want to get back to my life.

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On October eighth, two thousand and four, Martha Stewart reported

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to the Federal Prison camp in Alderson, West Virginia, f

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PC Alderson, nicknamed Camp Cupcake, though Martha hated that term.

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Was a minimum security facility housing about one thousand women.

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Martha became inmate five five one seven zero dash zero

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five to four. She was assigned to a bottom bunk

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in a room with three other women. She was given

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prison khakis and workboots. The woman who'd built an empire

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on Egyptian cotton sheets now slept on a plastic mattress.

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But here's what happened next. Martha Stewart didn't crumble, she

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didn't complain, she didn't act like she was better than

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anyone else. She got a job cleaning the administration building

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for twelve cents an hour. She taught yoga classes. She

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helped other inmates with their cases. The other women called

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her m Diddy. This was two thousand and four, when

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that reference wasn't problematic. She became friends with women from

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every background, drug dealers, embezzlers, women who'd never had her

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advantages and never would. On the night before Martha left,

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an inmate gave her a handmade poncho crocheted from Commissary yarn.

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Wear it in good health, the woman said. Martha wore

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that poncho walking out of prison on March fourth, two

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thousand and five at twelve thirty am. She still has

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it in her attic. While she was in prison, something

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remarkable happened. America decided they missed Martha Stewart. Her company's

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stock quadrupled. NBC announced two new shows for her, a

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daytime talk show and an Apprentice spin off. Kmart expanded

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her product line The Woman who Went to Prison, A

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controversial figure, came out a folk hero. Her five months

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of home confinement in Bedford, New York should have been easy,

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forty eight hours a week allowed out for work monitoring

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via ankle bracelet, but Martha, being Martha, she turned it

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into content. She loogged about it, She made jokes about

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her ankle monitor. She showed America that she could take

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a punch and keep moving. The Martha Stewart Show premiered

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in September two thousand and five. The Apprentice Martha Stewart

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also premiered that month. The Apprentice flopped one season and done,

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but her talk show ran until twenty twelve. Her magazine continued.

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Her products expanded to Macy's Home Depot and eventually Amazon.

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In two thousand and six, she settled with the SEC,

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accepting a five year ban from serving as a director

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or CEO of a public company and paying one hundred

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and ninety five thousand dollars less than she'd saved on

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the inm clone.

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Sale back in a moment.

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Now here's what makes Martha Stewart different from Phil Spector,

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from Robert Blake, from every celebrity who thought they were

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above the law. She owned it, not immediately, not perfectly,

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but eventually, Martha Stuart admitted she'd made a mistake. She

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served her time without complaint. She came back and built

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her empire even bigger. Today, at eighty four, she's worth

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over four hundred million dollars. She's on the cover of

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Sports Illustrated Swimsuit at eighty one. She's friends with Snoop Dogg.

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She has a Netflix documentary. The government tried to make

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an example of Martha Stewart. They wanted to show that

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even billionaires could go to prison for lying to federal investigators,

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and they succeeded. But Martha Stewart made an example of

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herself too, an example of how to handle failure, how

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to accept consequences, and how to rebuild. You know what

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Martha told Katie Curic in twenty seventeen, She called prison horrifying.

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She said, it was so horrifying to me that I

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had to go through that to be a trophy for

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these idiots in the US US Attorney's office. Those prosecutors

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should have been put in a queason art and turned

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on high.

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But you know what she didn't say. She didn't say

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she was innocent. She didn't claim it was a conspiracy.

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She didn't spend the rest of her life playing victim.

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The crime wasn't the stock sale, it was the cover up.

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The lesson isn't about insider trading. It's about what happens

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when you lie to federal investigators. Martha Stewart learned that

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lesson in the hardest possible way. Then she came back

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and showed America that federal prison doesn't have to be

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the end of your story. It can be a semi coolon.

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Phil Spector died in prison, denying he killed anyone. Martha

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Stewart left prison wearing a poncho made by a fellow

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inmate and rebuilt her empire. One couldn't admit fault. One could.

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That's the difference between dying in a cage and dying

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a billionaire. That's celebrity trials for Sunday, August twenty fourth.

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Two weekend stories, two different endings. Phil Spector, who never

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admitted guilt, died in prison from COVID. Martha Stewart, who

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served her time with dignity, is worth four hundred million

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dollars at eighty four. Tomorrow, we're back to the daily murders,

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the fresh tragedies, the killers who think they're smarter than

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everyone else. But this weekend, remember these two stories. Remember

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that fame doesn't make you bulletproof, Remember that the cover

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up is always worse than the crime. And remember that

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sometimes the best thing you can do is admit you

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screwed up and serve your time. I'm read Carter.

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Martha Stewart went to prison for lying about a two

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hundred and thirty thousand dollars stock sale. Phil Spector went

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to prison for shooting a woman in the mouth. Only

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one of them came back. Character, folks, in the end,

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It's all about character. See you tomorrow.