Why Did Martha Stewart Go to Prison? What to Know About Her Time Behind Bars Over 2 Decades Ago
Why Did Martha Stewart Go to Prison? What to Know About Her Time Behind Bars Over 2 Decades Ago
Lynsey Eidell, Emily KrauserWed, March 4, 2026 at 12:15 PM UTC
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Martha Stewart leaves a U.S. federal courthouse in New York City on March 17, 2005Credit: DON EMMERT/AFP via Getty -
Martha Stewart was found guilty of conspiracy, obstruction and two counts of lying to federal investigators in March 2004
The media mogul served five months in prison from October 2004 to March 2005
Within a year of her release from prison in 2005, Stewart launched two TV shows
Martha Stewart has become as well-known for her brief time behind bars as her successful media career — but she's refused to let her prison time define her.
In 2004 during the peak of her career, Stewart — a best-selling author, successful entrepreneur, DIY guru and Emmy Award-winning TV host — spent five months in prison after becoming embroiled in an insider trading scandal.
Stewart's media empire, Martha Stewart Living Omnimedia, went public in 1999, making her the first female self-made billionaire in the U.S. Then, two years later in December 2001, she landed in hot water after selling her stake in ImClone Systems, a biopharmaceutical company. When investigators questioned her about the trade in early 2002, she and her stockbroker, Peter Bacanovic, maintained they had no insider information prompting the sale.
Federal prosecutors later accused Stewart, who was once a stockbroker herself, and Bacanovic of acting on non-public information when they made the trade and then lying to investigators about it. A highly publicized trial ensued in early 2004, and Stewart was found guilty of conspiracy, obstruction and two counts of lying to federal investigators. She was sentenced to five months in prison and two years of probation.
However, Stewart kept her company intact, wrote a book and debuted two new TV shows within less than a year of her release from prison on March 4, 2005.
"One thing I do not ever want is to be identified, or I don't want that to be the major thing of my life," she said about serving time on Katie Couric's eponymous podcast in October 2017. "I was a strong person to start with, and thank heavens I was, and I can still hold my head up high and know that I'm fine."
Here's everything to know about Martha Stewart's fraud case, from the trade that caused all the trouble to her post-prison comeback.
What was Martha Stewart accused of?
Peter Bacanovic arrives at a federal courthouse in N.Y.C. on March 5, 2004; Martha Stewart arrives at a federal courthouse in N.Y.C. during her and Bacanovic's trialCredit: Rick Maiman/Bloomberg via Getty; RJ Capak/WireImage
Stewart faced both criminal and civil charges related to her 2001 sale of ImClone shares.
On June 4, 2003, the SEC filed a civil lawsuit against Stewart and her stockbroker, Bacanovic, alleging the pair committed securities fraud by participating in illegal insider trading. The same day, a federal grand jury indicted Stewart on nine counts of securities fraud, making false statements and obstruction of justice, The New York Times reported.
The charges stemmed from a stock trade that occurred on Dec. 27, 2001. According to the federal indictment, Bacanovic was informed by his assistant, Douglas Faneuil, that the CEO of ImClone, Sam Waksal, was selling off the majority of his shares after learning that the FDA intended to reject Erbitux, a cancer drug developed by the company. As a result, Bacanovic allegedly instructed Faneuil to inform Stewart that Waksal was dumping his shares.
Faneuil left Stewart a phone message that Stewart allegedly later tried to erase, which stated, "Peter Bacanovic thinks ImClone is going to start trading downward," per The New York Times. After speaking with Faneuil, Stewart allegedly requested that he sell her stake in ImClone, which was just under 4,000 shares.
In the months following the questionable trade, Stewart and Bacanovic claimed they had made a prior agreement to sell her ImClone shares if the stock price ever fell below $60.
However, congressional investigators found no record of a stop-loss order between Stewart and Bacanovic, according to Newsweek.
"This criminal case is about lying — lying to the F.B.I., lying to the SEC, lying to investors," James Comey, then the United States attorney for the Southern District of New York, said at a news conference when announcing the charges, via The New York Times. "Martha Stewart is being prosecuted not for who she is, but because of what she did."
How much did Martha Stewart make from selling her ImClone shares?
Martha Stewart is spotted outside of Bryant Park Hotel in N.Y.C. on June 2, 2004Credit: James Devaney/WireImage
Stewart had 3,928 shares in ImClone, according to the SEC's complaint. When she sold her stake on Dec. 27, 2001, the shares cashed out at approximately $227,000, according to The New York Times. Stewart netted a profit of approximately $51,000 from the sale, per ABC News.
On Dec. 28, 2001, the day after Stewart sold her shares, the FDA announced that it had rejected ImClone's application for the approval of Erbitux. By the next day of trading, ImClone's stock dropped 16%, from $60 per share to $46 per share, according to an SEC release at the time. The SEC alleged that Stewart avoided losses of more than $45,000 by selling her stake when she did.
What was Martha Stewart convicted of?
Martha Stewart prepares to make a statement as she leaves the Federal Court in N.Y.C., following her sentencing on July 16, 2004Credit: DON EMMERT/AFP via Getty
Following a six-week trial in early 2004, Stewart was found guilty of conspiracy, obstruction and two counts of lying to federal investigators. The judge had previously dismissed the most serious criminal charge against her of securities fraud.
Prosecutors alleged that Stewart committed securities fraud when she lied about why she sold her ImClone stock. They claimed her false statements were made to maintain her innocence and bolster the stock price of her own company, Martha Stewart Living Omnimedia, The New York Times reported. The securities fraud charge would have carried a maximum penalty of 10 years in prison, according to The Guardian.
In August 2006, two years after her criminal trial, Stewart settled with the SEC over the civil insider trading charges against her, bringing her legal saga to an end. She agreed to pay $195,000 in fines and penalties, per The New York Times, and was barred from serving as a director or chief executive officer of any public company for five years.
How long was Martha Stewart in prison?
Martha Stewart leaves federal court in N.Y.C. after being sentenced on July 16, 2004Credit: DON EMMERT/AFP/Getty
Stewart was sentenced to five months in prison, plus five months of home confinement and two years of supervised probation.
"I'll be back. I will be back," she said outside of the courthouse following sentencing, per The New York Times. "I'm used to all kinds of hard work, as you know, and I'm not afraid. I'm not afraid whatsoever."
The lifestyle mogul and TV personality checked into a minimum-security federal correctional facility in Alderson, W.V., on Oct. 8, 2004.
She served the full five months and was released on March 4, 2005, per CNN, then returned to her home in Bedford, N.Y., where she completed her five months of house arrest.
"The experience of the last five months in Alderson, West Virginia, has been life-altering and life-affirming," Stewart said in a statement on her website on the date of her release, according to CBS News. "Someday, I hope to have the chance to talk more about all that has happened, the extraordinary people I have met here and all that I have learned."
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She added, "Right now, as you can imagine, I am thrilled to be returning to my more familiar life. My heart is filled with joy at the prospect of the warm embraces of my family, friends and colleagues. Certainly, there is no place like home."
Journalist Matt Tyrnauer, who interviewed Stewart for the August 2005 issue of Vanity Fair, told Good Morning America in July 2005 that the media entrepreneur hated her time in home confinement more than the months in prison.
What has Martha Stewart said about her time in prison?
Martha Stewart holds the crocheted poncho she wore when leaving prison during a press conference at the Martha Stewart Offices in N.Y.C.'s Chelsea neighborhood on March 7, 2005Credit: Carvalho/FilmMagic
Stewart shared her initial thoughts on prison life shortly after she was first incarcerated. On Oct. 18, 2004, she released a statement on her website about settling in, likening the prison to a "college campus."
"The camp is fine; it is pretty much what I anticipated," she wrote. "The best news — everyone is nice — both the officials and my fellow inmates. I have adjusted and am very busy. The camp is like an old-fashioned college campus — without the freedom, of course."
In the years since her release from prison, Stewart has spoken more openly about the highs and lows of the experience.
She told PEOPLE in November 2020 that she spent her time in prison revisiting old hobbies and cultivating new crafty ones.
"Even when I went away [to Alderson Federal Prison Camp] for five months, I got through it," she said. "I learned how to crochet. I still have the gorgeous crocheted poncho [that I wore leaving prison]. It's in the attic. And I re-upped my ceramics there. I had done a lot of ceramics as a child, and we had this fabulous ceramics studio in West Virginia, and I made an entire crèche scene. That's my best memory."
However, not all of Stewart's memories from prison are fond. She opened up on Couric's self-titled podcast in 2017 about her time spent behind bars, calling it "a horrible experience."
"It was horrifying and no one, no one, should have to go through that kind of indignity, really, except for murderers, and there are a few other categories, but no one should have to go through that. It's a very, very awful thing," she told Couric, adding, "There are lots and lots of disturbing things that go on in an incarceration like that."
Stewart believed, however, that the prison time made her "stronger."
"I knew I was strong going in, and I was certainly stronger coming out," she told Harper's Bazaar in February 2021. "It was a very serious happening in my life. I take it very seriously. I'm not bitter about it."
While incarcerated, Stewart kept a journal. The entries, which detailed the living conditions and "severe" punishments, were shared in the 2024 Netflix documentary Martha.
"I saw two very well-dressed ladies walking, and I breezed by them, remarking on the beautiful warm morning and how nice they looked," Stewart wrote. "When I realized from the big silver key chain that they were guards, I lightly brushed the chain."
On camera, she added, "I was dragged into solitary for touching an officer. No food or water for a day. This was Camp Cupcake, remember? That was the nickname. Camp Cupcake. It was not a cupcake."
What has Martha Stewart done since her release from prison in 2005?
Martha Stewart attends the 2023 'Sports Illustrated Swimsuit' issue launch at the Hard Rock Hotel New York in N.Y.C. on May 18, 2023Credit: Gotham/FilmMagic
Following her release from prison in March 2005, Stewart staged her comeback almost immediately.
She returned to TV in September 2005 with two shows: The Martha Stewart Show, a daytime talk show, and The Apprentice: Martha Stewart, a spinoff of Donald Trump's reality show. Though her iteration of The Apprentice only lasted one season, her talk show was much more successful, running from 2005 to 2012 and earning her three Daytime Emmys. After her talk show ended, Stewart hosted the Martha Stewart Cooking School, a PBS cooking series, from 2012 to 2017.
Stewart has also appeared as a guest host on Food Network's Chopped, hosted the Food Network competition show Bakeaway Camp with Martha Stewart, had an HGTV show titled Martha Knows Best and developed and hosted three shows for the Roku Channel — Martha Cooks, Martha Gardens and Martha Holidays. She returned to the small screen in 2025, teaming up with José Andrés for the cooking competition show Yes, Chef!.
She has also developed a friendship with "Gin and Juice" rapper Snoop Dogg. The "odd couple," as Stewart has described them, first met when he appeared on her daytime talk show in 2008. From there, the two formed an unlikely bond that is both personal and professional, with Stewart and Snoop hosting two celebrity cooking shows for VH1: Martha & Snoop's Dinner Party and Martha & Snoop's Potluck Party Challenge.
In December 2025, the duo collaborated on cocktail recipes for Snoop and Dr. Dre's liquor brand Still G.I.N. Snoop and Stewart also served as special correspondents for the 2024 Summer Olympics in Paris and the 2026 Winter Olympics in Milan.
Stewart's post-prison success hasn't been limited to just TV. She has published more books, launched a home line with Wayfair, developed a line of CBD products and created a skincare line called Elm Biosciences alongside dermatologist Dr. Dhaval Bhanusali. In 2015, she sold her multimedia empire, Martha Stewart Living Omnimedia, for $353 million, per Forbes.
Before prison, Stewart appeared as herself on '90s sitcoms such as Ellen, 3rd Rock from the Sun and Cosby. She continued after release, making cameos on Ugly Betty, 2 Broke Girls and Donny!, as well as in the 2016 film Bad Moms.
In May 2023, Stewart made history when, at 81 years old, she became the oldest woman to appear on the cover of Sports Illustrated Swimsuit. "There's no reason to retire," Stewart told PEOPLE at the time.
She also squashed the idea of slowing down or taking time off. "That's not what my life is about," Stewart said. "My life is about doing things and learning things and teaching things."
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Source: “AOL Entertainment”
