Martha's Pal Drops Bombshell in Court

02/20/2004 AT 10:15 AM EST

At Martha Stewart's trial on Thursday, Mariana Pasternak, the domestic diva's friend for more than 20 years, offered the prosecution some testimony that will certainly leave Stewart wondering about the state of the duo's friendship.

Pasternak, a real estate agent and Westport, Conn., neighbor of Stewart's, testified about a conversation she and Stewart had while vacationing in Mexico in late 2001, the Associated Press reports. The vacation came on the heels of Stewart's sale of her shares of ImClone Systems stock.

Pasternak testified that on Dec. 30, 2001, while in Mexico, Stewart made comments about ImClone CEO Sam Waksal selling his shares in his company, and that Stewart subsequently sold her ImClone shares. According to Pasternak, Stewart said, "Isn't it nice to have brokers who tell you those things?" Waksal is now serving a prison sentence for the sale of his shares.

However, during cross-examination by the defense Friday morning, Martha's legal team had Pasternak retracting some of her words. During questioning from Stewart's attorneys, Pasternak admitted that she was not sure whether the words had actually come from Martha or if it was a statement she had said herself, CNN reports.

Three months after the trip, Stewart told investigators that she did not have any memory of being told about Waksal's sale, AP reports. Pasternak's testimony could be the most damaging against Stewart in the case so far, experts say.

Stewart, 62, and her broker Peter Bacanovic are on trial for lying to investigators about the nature of the sale, which took place Dec. 27, 2001. Stewart also faces charges of securities fraud for lying to investors in her company, Martha Stewart Living Omnimedia, while she was under investigation.

Also on Thursday, a forensics expert took the stand to testify that a notation made by Stewart's broker Bacanovic on a worksheet in her portfolio was written in different ink than the other notations on the page. The defense claims that the writing, which reads "@60," is proof of a prior agreement Stewart and Bacanovic had to sell the ImClone stock when it fell to that price. The expert said that statement was in fact written in different ink.

Robert Morvillo, Stewart's lead attorney, said Thursday he's not sure whether his client will take the stand in her defense, Reuters reports. If she does, Morvillo added, she will likely testify on a number of issues.

The prosecution is expected to rest its case Friday.

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