WAKSAL SET TO COP PLEAOct 15, 2002 | NYPOST.COM
Martha Stewart's pal Sam Waksal is expected to plead guilty as early as today to insider-trading charges stemming from the ImClone scandal, putting federal investigators one step closer to prosecuting the domestic diva.
Two sources told The Post last night the ImClone founder was planning to enter a plea in the hope of reducing his prison sentence and saving his father and daughter from being charged.
It was not clear whether Waksal has agreed to testify against Stewart - as has the assistant to her broker - but he will tell investigators all he knows about the trading of Imclone stocks on Dec. 27, the sources said.
Stewart sold off 3,900 of her ImClone shares that day, the same day Waksal allegedly told his daughter Aliza and father, Jack, to dump millions of dollars worth of the stock after learning the Food and Drug Administration was about to reject a key application involving the company's highly touted cancer drug.
Stewart maintains she dumped her stock because of a pre-existing arrangement with her high-flying society broker, Peter Bacanovic, to sell when the share price dropped below $60.
But Bacanovic's assistant at Merrill Lynch, Douglas Faneuil, has contradicted her story and is prepared to testify against her.
Waksal's decision to take a plea came after federal prosecutor Michael Schachter told a Manhattan judge in August the case was "very simple."
Waksal, 54, had pleaded not guilty to 13 charges, including bank fraud.
Now, he is expected to admit at least to securities-fraud.
He was intending to fight the charges, until four new counts, including the bank-fraud charge, were added in August. Then Waksal began new talks with the office of Manhattan U.S. Attorney Jim Comey.
Waksal had been charged in June with nine counts of securities fraud, conspiracy to commit securities fraud, and perjury.
He would have run the risk of facing a maximum sentence of 30 years on the bank-fraud charge alone if he went to trial and was convicted. That was a factor in his change of heart, sources said.
He would still face several years' prison time under the deal, but investigators have indicated they would not file charges against his father and daughter.