Why Did Martha Stewart Go to Prison? A Look Back at Her 2004 Fraud Case

The lifestyle icon spent five months in prison for lying to investigators about a stock trade

Spencer Platt/Getty Martha Stewart exits court after the sentencing phase of her conviction on a stock-trading scandal on July 16, 2004 in New York City.

Spencer Platt/Getty

Martha Stewart exits court after the sentencing phase of her conviction on a stock-trading scandal on July 16, 2004 in New York City.

Martha Stewart has been many things in her lifetime: A best-selling author, a successful entrepreneur, an Emmy-award-winning television host — but in 2004, she spent five months behind bars for lying about a stock trade.

Stewart’s legal troubles began more than two decades ago when her career was at its peak. Her media empire, Martha Stewart Living Omnimedia, had gone public in 1999, making Stewart the first female self-made billionaire in the U.S. A few years later, however, Stewart found herself wrapped up in an insider trading scandal that would eventually send her to prison.

Stewart landed in hot water after selling her stake in ImClone Systems, a biopharmaceutical company, in December 2001. When investigators questioned her on the trade in early 2002, she and her stockbroker, Peter Bacanovic, maintained that they had no insider info that prompted the sale. However, federal prosecutors later accused Stewart (who was once a stockbroker herself) and Bacanovic of acting on non-public knowledge when they made the trade — and then lying about it to the feds.

A highly publicized trial ensued in early 2004, and Stewart was found guilty on charges including conspiracy and obstruction of justice. She was sentenced to five months in prison and two years of probation — leaving the future of her company and her reputation uncertain.

But despite the negative press and her stint behind bars, Stewart rebounded. She kept her company intact, wrote a book and debuted two new television shows within less than a year of her release from prison in March 2005 — and hasn’t slowed down since. (She’s still posting Instagram thirst traps at 82 years old.)

So, how did Stewart survive the stockbroking scandal and come out stronger on the other side? The global icon attributes her post-prison success to her refusal to let her time in jail define her.

Related: Martha Stewart's Life in Photos

“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 told Katie Couric in 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.”

Stewart’s resiliency throughout the highs and lows of her life is the subject of a new CNN miniseries, The Many Lives of Martha Stewart, which premieres on Jan. 28. The four hour-long episodes will chronicle her “explosive rise to success, her staggering fall from grace, and her momentous comeback to the limelight,” according to a release, and feature interviews with Stewart’s past employees, former inmates, fellow chefs and loved ones.