Scamfluencers - Encore: Martha Stewart: The Homemaker Hustler Part 1 | 229

Episode Date: August 31, 2026

We’ll be back in two weeks with new episodes, but in the meantime, we’re revisiting an episode about one of America’s most famous lifestyle moguls:Martha Stewart spends decades building her lifestyle empire from the ground up. Her cut-throat business savvy helps make her America’s first self-made female billionaire. But when she becomes embroiled in an insider trading scandal in 2002, it’ll spark a media circus and threaten to muddy her squeaky clean image. A damning investigation by the U.S. government promises to take her down – alongside some of her closest friends. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Audible subscribers can listen to all our episodes of scam influencers ad-free right now. Join Audible today by downloading the Audible app. We'll be back in two weeks with all new episodes of scam influencers. But first, we're revising a story about someone who continues to stay in the headlines, Martha Stewart. Martha turned 85 a few weeks ago, and she's busier than ever. She recently co-founded an AI-powered management app called Hint, which uses AI to help manage your home maintenance. So if you've ever wanted Martha Stewart to nag you about cleaning your gutters, your dream has come true. You know, I don't think I need that and I don't think I want her to have my data.

Oh, well, that's not all. Kate Blanchett has been cast to play Martha in an upcoming biopic called Good Thing, named after Martha's famous catchphrase. I do think that could be an incredible film and I think Kate Blanchett will transform. Well, Martha's entire arc is pretty incredible. She went from being the first self-made female billionaire in America to a federal inmate to a Sports Illustrated swimsuit cover model at 81. And now she's launching tech startups and getting the Hollywood treatment. You know, say what you want about her. She is one of one.

It's the kind of comeback story that makes you wonder if the scandal even mattered. So with Martha back in the spotlight and about to be immortalized on the big screen, we thought it was the perfect time to revisit how she went from lifestyle queen to convicted felon and how a stock tip turned into one of the most high-profile white-collar cases of the 2000s. So grab your homemade lemon bars and enjoy the encore of part one of our two-part series on Martha Stewart, the Homemaker Hustler. Sarah, hello. Hey, Sachi. Okay, so a lot of times the people we cover on this show are not household names.

But the subject of today's episode absolutely is. I think she might be one of the most famous people on the planet. Sarah, what are your thoughts on Martha Stewart? It's complicated because I do think she has some of the best recipes and like they're always going to be good. But also, I have a feeling she's a little bit evil. Okay, you know what? That's a good assessment. Well, you might think you know everything about the reigning domestic queen.

and I happen to know that you have eaten at her restaurant in Vegas. You talk about it all the time. But trust me, when I tell you, there are so many strange and surprising details in this story and so many things I didn't know about the saga of her insider trading scandal, including three people who are essential to it, a power broker, his lowly assistant, and New York's original pharma bro. It's June 25, 2002,

and Martha Stewart stands behind a kitchen counter on the set of CBS, is the early show. She's 60 years old and dressed in her preppyest pink button up. Her trademark blonde Bob is smooth to waspy perfection, and she looks serene and controlled. The bundle of ingredients in front of her is ready for chopping. On today's menu, potluck salads made with chicken and cabbage. Martha's acting like this is one of her normal weekly appearances on the show, but there's nothing normal about what happens next. CBS host Jane Clayson joins her on set, And as Martha gets to work on the chicken salad, Jane addresses the elephant in the room. She says, quote, our good friend Martha Stewart has been in the headlines lately.

By the look on Martha's face, she does not want to engage. She deflects by telling Jane about the salad they're going to make. But Jane isn't going to let her change the subject so easily. So Martha explains what's been going on. She says she's involved in an investigation centering on a pharmaceutical company called Imclone. Translation, she is at the set. center of an insider trading scandal. But after that, Martha makes it clear that she's done talking about the scandal that has

become a source of comedy and fascination for seemingly everyone in America. She picks up her knife and starts chopping her cabbage, telling Jane, quote, I'm just not at liberty at this time to make comments whatsoever. And I certainly hope the matter is resolved in the very near future. That's exactly how human beings talk when making a chicken salad. Yeah, it makes her look kind of silly and unprepared for this media appearance. At one point, she tells Jane that she's confident that she'll be, quote, exonerated of any ridiculousness. Jane keeps pressing until Martha reaches a breaking point.

And through a forced smile, she says, quote, My employees and I are hard at work and making our company the best omnimedia company in the world, Jane. And I want to focus on my salad because that's why we're here. Oh, my God. Well, Martha, live in reality for a second here. No one's focusing on your salad. No one can even register you're making a solid right now. Okay?

Unsurprisingly, she will be mocked for that phrase for months to come. The New York Post runs the headline Martha Salad Days. The Washington Post says, Stewart gets sliced up. Newsweek describes a situation in two words. More ridiculousness. And the public takes it and runs with it. I just want to focus on my salad basically becomes a meme before memes or even a thing.

It's open season on Martha Stewart. Police in Irvine, California, are investigating the double murder of a young couple in the parking lot of their apartment complex. A double homicide grabs the public's attention by the throat. We have identified Christopher Dorner as a suspect in this double homicide. A former cop, and still in the loose. Considered armed and extremely dangerous. And scariest of all, he left something behind. A particular interest is a multi-page manifesto.

This manifesto on Facebook is 11 pages long. Trace, this manifesto from this suspect who's targeting cops, it's stunning. Listen to the show, The New Yorker calls one of the best podcasts of the summer. Dan Tiberski's Manifesto. And I tell you, this manifesto, it scares a hell out of me. Listen to Dan Tiberski's Manifesto, wherever you get your podcasts, or binge the entire series right now, only with Audible. James Arthur Ray was a charismatic self-help guru

who promised his followers a path to wealth and enlightenment by becoming the best versions of themselves. But not all who followed him finished their journey. For the best bingeable series, listen to the Audible True Crime podcast wherever you get your podcasts. From Wondery, I'm Sachi Cole. And I'm Sarah Hagey. And this is scam influencers.

Our two-part series on Martha Stewart is about how a woman from a middle-class family in New Jersey ended up becoming America's first self-made female billionaire. But it's also about the value of women's work, the shifting nature of celebrity over the 2000s, and the most American scam of all, obscene wealth. This is Martha Stewart, the Homemaker Hustler, part one. Before her name becomes synonymous with the brand,

Martha is just a kid growing up in New Jersey in the 40s. She's the second oldest of six children in a middle-class Catholic family. Both of her parents are teachers, born to immigrants from Poland. And Martha later says that her mom taught her everything she knows about gardening, sewing, cooking, and entertaining. And Martha takes to it right away. Her mom later recalls that Martha's first catering event was cooking breakfast for her high school football team. Martha's also got an entrepreneurial streak.

She babysits for 50 cents in a day. hour. And when she gets scouted to model at 15, she goes for it. And listen, she can model. Sarah, I want you to look at these photos of young Martha. Oh, I have seen these before. She definitely has like it. And she kind of looks like Rosamond Pike, that actress a bit. Ooh, yeah, you're right. Yeah, she's gorgeous. Martha gets a scholarship to Barnard College where she studies history and architecture. But she keeps modeling on the side. It helps pay for her living expenses, and it also gives her something money can't buy. Here's what she says in an interview with fresh air years later.

It gave me a certain self-confidence that a lot of young women lack. And it was very, very good experience. It must be with that confidence that Martha says yes to a blind date with Yale law student, Andy Stewart. She's just 19, and she's never had a boyfriend. She and Andy quickly fall in love, and she later says, that Andy desperately wanted to get married. So a year later, in 1961, they tie the knot. Martha actually makes her own wedding dress because, of course, she does.

Martha moves to New Haven, Connecticut with Andy, who's still got another year left at Yale. But Martha's still at Barnard, so she commutes nearly four hours on the train to Manhattan and back. Two years after she graduates, she gives birth to a daughter named Alexis. But Martha has no plans to become a stay-at-home mom. Andy is getting his career off the ground as a lawyer,

and Martha is determined to make a name for herself as well. So she heads to Wall Street and finds a job as a stockbroker. Years later, she talks to Barbara Walters on 2020 about what attracted her to the gig. I found it very exciting. I was fascinated with companies and the way they developed and built their businesses. You were good.

Yes, I was good. That is pretty crazy because I know that, you know, even as recently as the 2000, it's not very common to have a woman try and take on that job. No, and I think people don't know that Martha used to do this, right? Yeah, and you know what?

Props to her for being like, yeah, this is something I want to do, I'm going to try it, why not? Yeah. Well, Martha was reportedly the only woman at the firm she worked at, but she leaned into it. She said she sported velvet hot pants to work

and kicked her feet up on the desk. She reportedly makes six figures a year by the early 70s, which would be more than a million dollars in today's money. Damn, she was really good at it. She's rich, bitch. In 1971, when Martha is 30, she and Andy decide to buy a property in the wealthy suburb of Westport, Connecticut. The town is home to celebrities like Paul Newman and Joanne Woodward, but Martha's property isn't that glamorous, at least not at first.

It's an old, run-down farmhouse on a former onion farm. It was built in 1805 and a needless. a ton of work, but Martha sees potential. She throws herself into renovating the property, which later becomes known by its street name, Turkey Hill. It's a big project, but it's also fun and challenging. And most of all, it lets Martha reconnect with the homemaking skills her mother taught her as a kid. It's mostly a hobby for Martha, until a couple of years later, when the stock market tanks.

Martha takes a downturn hard. She doesn't like losing. So she ditches Wall Street and decides to go all in on the business event. entertaining. And despite all odds, Martha will find that homemaking is where the real money is. It's the mid-70s and Norma Collier has teamed up with her longtime friend, Martha, to start a catering business. Norma is thin and tall with shoulder-length brown hair. She and Martha were models back in the day. They met when they were both named Best Dressed College Girls in America by Glamour Magazine. Now they're both working mothers and they know how hard it is to juggle a career,

parenthood and a social life. So they decide to cater their business to women who want to look like they have it all, but don't actually have time to cook. They call it the uncatered affair. Their schick is that they do all the cooking and decorating behind the scenes of a party while making it look like the host did all of it herself. Their clients aren't just buying the extravagant meals for their guests. They're paying for the illusion that women can do everything.

Honestly, this is so genius. It's so smart. It's like such a good idea. It's crazy it took that long to come up with it even for the time. From the moment this episode began, I'm like, Martha Stewart is a genius and I'm going to keep finding out the different ways she's a genius. This is brilliant. While uncatered affair starts out small, catering dinners for a dozen or so guests.

But as the business gets more popular, Norma and Martha start having disagreements about how they want to grow. Sarah, can you read what Norma later tells New York Magazine? Yes, she says, I was happy doing parties for 10 or 12, and if it wasn't for 1,000, it wasn't good enough for Martha. I mean, I don't think either of them are wrong, but it's just, you know, she was happy having this kind of normal business. And Martha clearly had what we call now a growth mindset, you know?

Yeah, man, listen, she's a shrewd capitalist. She's not going to do nothing for nothing, you know? Well, one day, Norma's at Martha's Turkey Hill estate prepping for a catering gig. And when she rounds the corner into the kitchen, she overhears Martha talking in hushed tones. According to Norma, Martha tells Andy, quote, I deserve to keep more than her

because I work harder and I'm more talented. But Norma doesn't take that line down. She says that she walks right into the kitchen and tells Martha that she'll finish working this party, but after that, she's done with her partnership. Martha takes uncatered affair over, and she rebrands it under her name. Now that she's the one in charge,

her ambitions are free to, extend far beyond Connecticut kitchens. She's about to go from housewife to household name. Martha's company takes off fast, attracting A-list clients with big appetites and even bigger bank accounts. It helps that her neighbors in Westport include celebs like Robert Redford and Ralph Lauren, and they all hire her to cater their events. Her husband Andy is now working as a publishing executive, and she leverages those

connections too. One night, in 1980, his company is throwing a business. big deal book party in New York City, and her company gets hired to cater the event. She does such a good job than another publishing executive at the party, a friend of Andes, takes notice. He asks Martha if she's ever thought about publishing a cookbook. It turns out Martha has. But she later tells the Miami Herald that she couldn't publish the book with Andy's company because, quote, they had this thing about nepotism. That doesn't even sound true. It does not, but okay. Well, shortly afterwards,

words in 1982, Martha's first book is published. It's called entertaining and it's unusual for the times. It's expensive, in part because Martha insisted that all the photographs be in full color. And the book has more than just recipes. It also has tips on table setting and decorating for everything from a romantic dinner for two to an at-home wedding. Here, look at the cover. The cover is obviously dated, but it's beautiful. It's very bright and vivid. It's Martha at a dinner table, getting ready to host, and she looks gorgeous and she's wearing white, and everything just looks so safe and aspirational, you know, you're like, I would trust her to tell me how to do that. Yeah, I would too. Well, when the book comes out, Martha spends a month on the road,

giving interviews and cooking demonstrations across the country. The first printing of 25,000 copies sells out immediately, and the publisher reprints another 50,000. Entertaining is a massive hit. No one could have predicted it. except Martha. She later tells New York Magazine, quote, I didn't not expect it to be a hit. That was the funny thing. And I think that sort of bothered people.

This is why she is still relevant and still famous. She knows her worth. And yeah, why should she have to feign surprise? She knew what she was doing. Well, Martha later tells Barbara Walters that the book wasn't just about cooking or even about entertaining. It was about entirely rebranding

what it meant to be a housewife. I think it was to make housewives, homemakers, understand that what they were doing on a daily basis was something to be commended, applauded, looked at with happiness. Rather than look at working around the house as housework, I started looking at it as homemaking. Throughout the 80s, Martha publishes homemaking and cooking guides

on everything from holidays and weddings to quick and easy dinners. But books are just the beginning. She launches a newsletter, sells a line, of cookware by mail and even hosts monthly seminars at Turkey Hill. The three-day lectures cost $900 to attend, and this does not include lodging. But while Martha's business is booming, her marriage is floundering. In 1987, as she prepares to release her fifth book in as many years, Andy drops a bombshell. He's leaving her. Reportedly, things had been bad for a long time. Norma, Martha's former business partner, later tells People magazine that Martha belittled and berated

her husband, and the tabloids are filled with rumors about extramarital affairs. Andy reportedly gets a court order barring Martha from speaking to him. And after a long separation, Martha and Andy divorce in 1990, the same year that Martha launches her signature magazine, Martha Stewart Living. Messy divorce notwithstanding, Martha's well on her way to building a media empire. And as she continues to amass wealth, she becomes an avid investor, including in a friend's biopharmist startup. Little does she know, this company is about to become famous, but for all the wrong reasons.

It's a chilly spring morning in April 1992. A biopharma executive named Sam Waxell is sitting down for a breakfast meeting at an Upper East Side Cafe. He's here to have bagels and orange juice with a renowned cancer researcher. Sam is 44 years old and reed thin. He's got olive skin and a receding hairline. He looks a little bit like Matt Lauer and Larry David melted together. Sam is the CEO of a company called Imklon, which he founded with his brother about seven years earlier.

His job involves taking lots of meetings with doctors and researchers. He's always on the hunt for new medical breakthroughs that he can then develop and sell as pharmaceuticals. So when the researcher he's meeting with starts telling him about a particular molecule that can shrink malignant tumors, Sam is ecstatic. He has a PhD in immunology, so he understands the research and immediately sees its potential. If he can find a way to harness this molecule, he thinks it could revolutionize cancer treatment.

It's a cause near and dear to his heart. His parents are both Holocaust survivors, and he often cites their resilience as his inspiration in life. He wants to help end human suffering. The researcher explains that he's only tested the treatment on mice. It needs to be tested on humans, and then put through extensive trials before it can get FDA approval. He tells Sam that he needs a businessman to handle all of this,

and Sam is eager to move forward. But not just because he thinks this treatment could help cancer patients. He also sees dollar signs. It's so crazy that him making money is such a big factor in this. Like, he could say it's to help people and make the world a better place, but ultimately, if this works, he will be filthy, rich, and that is so sad. Yeah, if you think about it too long, it gets super gross. And the truth is, Sam needs money.

His company, M-Clone, is struggling. Its biggest initiatives so far have been flopped. There was a DNA probe technology, a vaccine for hepatitis C, and an AIDS drug that all went nowhere. The company's gotten by on strategic partnerships with drug companies, infusions of cash from venture capitalists, and an IPO last year that raised more than $30 million. Sam has made a ton of money, but he also has a habit of spending it extravagantly. His 5,000 square foot loft in Soho is filled with museum quality art, including a Rothko and a rare collection of a Truscan pocket.

He hosts monthly salons and star-studded parties there, where the guest list often includes his good friend, Martha Stewart. They've known each other ever since they met at a charity event she catered in the early 80s. When Sam started Imclone, Martha became one of its first investors. And they grew even closer when Sam started dating Martha's daughter, Alexis, who is not much older than his own daughters. He and Alexis broke up a couple years back, but Sam and Martha are still close. That's weird.

Yeah, it is super weird. But here's Sam and he needs a win. So he decides to go all in on this molecule. He fronts the money to license and develop it into a drug. And the goal is to sell it to an even bigger pharma company and bring it to market. But it's a huge gamble. Imclone has no clinical experience, no manufacturing capability, and has never taken a drug through the FDA approval process.

But Sam won't let any of that stand in his way. He's sitting on a miracle drug and he's ready to cash in. Meanwhile, Martha is about to return to her stock market roots and rake in a huge fortune. But you don't get to the top without being a little bit of an asshole. Imagine you're reading Pride and Prejudice, except you're not reading it. Harris Dickinson and Marissa Abella are reading it to you on Audible. Her barbs sting you. His coldness sends a shiver up your spine.

Your heart aches. Your ears burn. You yearn for Elizabeth and Mr. Darcy to profess their undying love for one another. You can't bear it any longer. Well, maybe a chapter longer. Performance is so good, you'll give love a second chance. Audible. Stories that speak to you.

You stepped out for your morning jog. Except it's not your usual morning jog. You started listening to an epic sci-fi book on Audible. 30 chapters later, you've accidentally run a half marathon. You lost track of how far you've run somewhere just part. the city limits. You can't stop. You have to find out what happens next. Then it's over. The universe seems bigger. You feel different. You feel like you have no idea where you are. Audible. Stories that speak to you.

I feel like a legend. It's 1999, about seven years after Sam first learned about the cancer drug. And Martha is at the New York Stock Exchange. She's sporting an oh-so-90s, Shore blonde Bob and a navy blue blazer. She's standing on the balcony podium, overlooking the trading floor, and she's surrounded by the nearly all-female executive team of the company she founded just two years earlier. It's called Martha Stewart Living Omnamedia, and it's the corporate umbrella for Martha's ever-expanding media empire. It includes her magazine, Martha Stewart Living, a cable TV show of the same name, and tons of merchandise. When Martha rings the opening bell to begin trading, the room erupts in applause.

Martha Stewart Living Omnamedia has officially gone public. Martha bursts into a big, toothy smile. This is not the smile she gives TV audiences or wears on the cover of her magazine. This is a geeked out, ear-to-ear, I fucking did it smile. Shares open at 18 bucks a pop and triple in value before closing. Martha owns a 70% stake in the company, which makes her, at least on paper, America's first self-made female billionaire. I actually didn't know that she was the first self-made female billionaire,

and this is before people knew billionaires were terrible. I feel like I should have known this. I know. And she's been working her ass off to get to where she is today. And it sure seems like her employees feel that intensity, working for her means anticipating her every need or unleashing her wrath. She's gained a reputation as an ice queen and a taskmaster. One rumor is that she slapped a today's show staffer

because she didn't like the design set of her segment. Her former gardener sued her for withholding overtime pay. She eventually triumphed against him in court. She even dished out to fans. After she was criticized for leaving a Buffalo New York charity event without signing all of the books she sold, she sent a letter to the local paper. Sarah, would you like to read from it?

Yeah, she says, I promise I'll think long and hard before I accept another invitation to your chilly and downright unfriendly city again. Martha. I'm like, yeah, that's kind of how I see her, and that's why she's successful. She's successful because she's mean. Well, to Martha, it seems like that's just the cost of running an empire, especially as a woman

with something to prove. She later tells People magazine, quote, even my own lawyers were negative about the possibility of success. I remember one lawyer sending me an orchid saying, oh, you did it. Wow, what a surprise. Martha has been uber wealthy for a while. But now she's in another stratosphere. She's filthy rich.

She reached the top of the business world, thanks and part to her perfectionism, and her obsessive attention to detail. But it's that habit of sweating the small stuff that's about to turn her dream life into a waking nightmare. It's December 2001, about two years after Martha Stewart living omnimedia went public. It's been a somber and anxious fall in Manhattan in the wake of 9-11. and Sam is eager to blow off some steam. Luckily, his annual Christmas party is the perfect place to do just that.

Tonight, his Soho Laugh is filled with famous faces. There's real estate and publishing magnate Mort Suckerman, future governor and serial creep, Andrew Cuomo, Mick Jagger of the Rolling Stones, and the biggest celebrity of all, Martha Stewart. Martha's good friend Peter Bechanovic is probably here too. He's in his late 30s with thick blonde hair and a square jaw. His look screams, I went to prep school, which he did.

He was raised in New York City by a doctor and a banker, immigrants from Serbia and Greece. By the time he went to Columbia University in the 80s, he was in the same elite social circle as Alexis Stewart, Martha's daughter. She went to Barnard, just like Martha. In the early 90s, not long after Alexa stayed at Sam, Peter went to work for Sam at Imclone. He was in the marketing department. And now, Peter works for Sam in a different kind of way. He's Sam's stockbroker. at Merrill Lynch. But Martha is hands down his most famous client. Peter handles her pension,

her personal accounts, the company's 401k plan, and even the employee stock options. Martha's own stock portfolio includes a ton of shares of Imclone, Sam's biopharma company. The stock has been doing extremely well because the drug that Sam's been developing is being hailed as a game-changing cancer treatment. It's now known as aerobotox, and it's gotten a ton of attention ever since being granted fast-track status by the FDA earlier that year. All of this has translated into a ton of hype and inflated stock prices. Airbatux has become so buzzed about that it even landed on the cover of Business Week over the summer.

The headline read, Imclone may have a cancer blockbuster. Sam and his brother capitalized on all the good press by borrowing more than $30 million from their company to buy up shares of its stock. Then, two months later, a major pharma company bought a billion, dollar stake in Imclone and put in another billion dollars for the marketing rights to Arbitux. And then right after that, Sam and his brother sold their shares to the pharma giant, netting

them $11 million. So this is all based on nothing actually happening in terms of this drug working. This is all based on talk and potential and what people think might happen, right? Yeah, it's all a little nebulous, but Sam is harboring a secret. Two days before the party, he and his brother got word that the FDA was having its doubts about aerotox. It's not an official no, but it's not a good sign. Sam knows that if the drug doesn't get approval by the FDA, it won't be allowed to go to market, which means Imclone stock will take a major hit, and so will everyone who owns shares of it, including him and Martha. Sharing information

about the stock is technically illegal. It could amount to insider trading. So Sam keeps quiet and keeps the party going. He spends Christmas vacationing on a resort in St. Bartz with his close friends, Clive Davis and Harvey Weinstein. But that's when he gets the news he's been dreading. The FDA is rejecting airbatux. Turns out its clinical trials had some serious flaws. Sam is devastated. The cancer treatment he spent nearly the last decade working on might never see the light of day. And because he and his inner circle have invested in it, they could all lose a fortune. He's got some serious damage. control to do. So the day after Christmas, he rushes back to New York on a private jet. He needs to save his company and his family from ruin. But he's not the only one about to get

caught up in M-Clone spiral. The day after Sam Jets home from St. Bartz, Doug Fenule is stuck in the office. Doug works at Merrill Lynch as Peter's assistant. He's a 26-year-old Vassar grad from Newton, Massachusetts. He has a baby face, a cleft chin, brown hair, and dark brown eyes. He resembles a young pre-divorce Ben Affleck. Doug is manning Peter's desk while he's in Miami. And even though it's the notoriously sleepy week between Christmas and New Year's, things in the office are moving. At 901 a.m., Doug gets an order to sell tens of thousands of shares in Imclone. It's from Sam's daughter, Eliza. She cashes out for $2.5 million. And shortly after, he gets another order. Sam requests to transfer nearly 80,000.

and shares into Eliza's Merrill account for another sale. This looks really suspicious to Doug, but he's just the assistant. So he calls Peter who agrees. Something fishy is going on. Peter calls in Merrill Lynch's compliance officers who end up refusing Sam's transfer since he's the CEO of Imclone, the same company who stock he's now trying to sell. Then Doug later claims that Peter says, out of nowhere, Oh my God, we have to call Martha.

Doug and Peter try to get Martha on the phone, but she's on vacation in Mexico. So Peter leaves a message. He says he expects Imclone to trend downward, and he says to call him back. Doug says that Peter then tells him that when Martha calls back, he is supposed to fill her in.

When Doug asks whether that means to fill her in on Sam trying to dump his shares, he says Peter tells him, quote, that's the whole point. By 11 a.m., Imclone stock has sunk to $60. That's a 20% drop from the day of Sam's Christmas party. And then, less than three hours later, Doug gets a call.

It's Martha. She asks Doug what the hell is going on. And he tells her about Sam trying to sell. Martha then asks the current market price for Imclone and tells him to dumb her stock. I mean, clearly a lot of what's been going on so far has been in this legal gray area. But this is when they're really doing the illegal insider trading, right? Yes, crimes are happening. Doug has never been a huge fan of Martha's.

She's always kind of been a jerk to him, but Peter's on vacation and it's Doug's job to process his client's stock trades. So Doug follows her instructions. The day after the trade, on a Friday afternoon, the FDA officially rejects Airbatux's application for FDA approval. On Monday, Mclone stock plunges 16%. And it keeps going down from there. It all looks really, really bad. And it's about to get the attention of federal investigators. Just a few days after Martha's trade, Peter sits in a conference room under harsh fluorescent lights.

I imagine he's still got a tan from his holiday trip to Miami. But now, back in Winery, New York, he's staring down two lawyers from the SEC. Peter probably thinks they want to talk about the Imclone trades he made on behalf of his client, Sam. He's prepared to talk about it. But then, the investigators catch him off guard. They tell him they're also looking into the trades made by one of his other clients, Martha's Stewart. This is where Peter's palms must get a little clammy. He knows his professional reputation depends on protecting Martha's, which is exactly what he does. First, he denies telling Martha that

Sam had dumped his Imclone stock. Second, Peter says that he sold Martha's stock because she'd previously instructed him to dump it if it dipped below a certain value. And third, Peter insists that he was the one, not Doug, who spoke to Martha on that day and arranged the sale. Martha sticks to the same story when it's her turn to be interrogated. But investigators aren't going to accept her account as the truth. The irony is, she's in this huge mess for dumping stocks that really only saved her about 45 grand, which, for a billionaire, is the equivalent of finding change between couch cushions. And this chump change is going to cost her more than she ever could have imagined. James Arthur Ray was a charismatic self-help guru, who promised his followers a path to wealth

and enlightenment by becoming the best versions of themselves. But not all who followed him finished their journey. After Ray appeared on Oprah, thousands flocked to his events. But what many people didn't know about were his more extreme methods, methods that push his followers to their limits, giving some the transformative experience they envisioned and killing others. For the best bingeable series, like the one I just told you about, listen to the Audible True Crime podcast wherever you get your podcasts.

Audible subscribers can get all episodes early and ad-free right now. Join Audible in the Audible app or by subscribing on Apple Podcasts. It's June 2002, about five months after Peter was interrogated by the SEC. Sam has just been arrested by the FBI on insider trading charges. And now it's all over the news that Martha could be charged next. On the day of Sam's arrest, she puts out an official statement. She says she didn't have any insider information and that she sold her stocks legally. But her denial doesn't do much to quiet the press.

They're in an absolute frenzy over the idea that Martha could potentially go to prison. So when she appears for her regular cooking segment on CBS's early show, it's not surprising that she ends up getting grilled. But Martha shuts down. This is the moment, remember, when she says she just wants to focus on her salad. I feel like seeing the series of events unfolded, This way is making it clear to me that when she was making that salad, I don't think she thought she was going to get into actual trouble.

No, probably not. Because Martha's handling the media circus the same way she handles everything in her life, with white knuckle control. But her approach completely backfires. A few days later, Conan O'Brien mocks the salad incident on his late night show with the help of a Martha impersonator. Take a listen. Okay, what about your calls to your friends warning them to dump their stock?

you don't want to dump too much in your stock. Chicken is good, of course, and onions. Martha gets roasted constantly during late-night monologues. Sarah, can you read one of David Letterman's jokes? Yeah, he goes, what a beautiful day in New York today. Isn't it fantastic? Here's how lovely it was today. Martha Stewart was doing her insider trading outside.

You know what? That gets me. Jokes like that get me. It's a good one. Well, late-night hosts aren't the only one spoofing Martha. her scandal is low-hanging fruit, and New York comedy clubs are eating it up. An Upper West Side Club even put together

an entire show about the scandal. People are thrilled to watch Martha Stewart fail. There's a feverish glee and giddiness to it all. Cheeky verging on bitchy headlines are all over the press that summer. Like Martha Stewart's to-do list may include some image polishing. A parody magazine cover called Martha Stewart

Living Behind Bars makes the rounds online. Here, take a look at this photo. of it. I mean, this is great. This really takes you back to a more innocent time where there was no real social media. Like, you know, these cycles lasted for so much longer because the only way you were seeing the jokes is if you were watching TV or reading the news. Yeah. And, you know, I feel like after 9-11, America deserved this, you know? Well, you're right. Making fun of Martha becomes its own mini economy, and it is booming. But Martha's bottom line, is falling fast.

In July 2002, about a month after her disastrous salad chopping appearance, Martha Stewart Living announces that they have, quote, begun to see some impact on our business. Despite the jokes, Martha remains quiet. Her business empire relies on presenting a flawless image. So in the heat of the scandal, Martha's strategy is to stay composed, stay in control,

and say next to nothing. But the celebrity scandal script is evolving. and Martha is not changing with it. Her refusal to admit to her flaws once felt aspirational, but now it feels old school and wildly out of step. What was once her billion dollar strategy now might lead to her downfall. It's mid-August, 2002, and the scandal has shown no signs of cooling. I imagine Martha is in a Manhattan boardroom meeting with her lawyers,

probably a dozen white guys wearing $4,000 suits, and they're preparing to send a bunch of documents to congressional members were looking into whether Martha committed insider trading. They say her actions warrant an investigation into, quote, misbehavior by corporate insiders. And since she won't agree to an interview, they're demanding all of her phone and email records relating to her Mclone trade. And Martha complies.

Sort of. Her lawyers have redacted huge swads of the records they send to Congress. The whole thing is practically unreadable. And the committee's investigators are, understandably, pissed off. So the Commerce Committee asks Martha to come in front of Congress and testify. But Martha's done talking. Her lawyers make it very clear that she'll plead the fifth for every question. And Sarah, I am so angry that we never got to see this happen.

I know, could you have imagined the power in that room of her just declining to answer any question? My personality would still be built off of that today if we ever got to see that. Well, Martha's lawyers eventually do deliver the unredacted documents to Capitol Hill. Hill, but her refusal to testify has made them suspicious as hell. Eventually, the committee shuts down its investigation, saying they've taken it as far as they can. But they're not done with Martha. They asked the Justice Department to look into whether Martha lied to Congress. Her stubborn silence is not helping. And at the same time, her brand is tanking. Martha Stewart Living subscriptions drop, sales of her Kmart liner down, TV and internet ad sales plummet.

The company has no choice but to de Martha Martha Stewart's company. They even roll out a new publication called Everyday Food, which is basically Martha Stewart Living, just without Martha on the cover. In November, Martha Stewart Living Omnamedia announces that its third quarter earnings have fallen by 42%. I feel like if this were to happen right now, the way culture is and the way the internet works,

you would have seen sales skyrocket. Like it would have catapulted her to something else, Like, it's really interesting to see how this really did affect her career very negatively. Yeah. But I have to imagine that what really twisted the knife in Martha's gut was when the company cancels her annual holiday special that year. At this point, no one can stop talking about Martha Stewart. In June of the following year, Martha goes to her attorney's office in Manhattan.

They put Justice Department lawyers on speakerphone, and they offer her a deal. It would require her to plead guilty, but it's her best chance at a moment. avoiding jail time. Martha asks for time to consider it, and that night, she comes to a decision. She's turning it down. The next day, her lawyers bring her back into the office and try to get her to reconsider.

They reportedly tell her that she'll never get a better deal. And turning it down means she'll have to go to trial, which will create an even bigger media frenzy. For years, Martha has made a career helping people throw dinner parties. And now, she set the table for the most unpleasant event of her life, a big, messy, federal trial. Afterwards, she'll be faced with her most serious redecorating challenge yet, her own reputation. That's next time in the finale to our two-part series.

Follow Scamphillincers on the Audible app or wherever you get your podcasts. You can listen to all episodes of Scamflincers ad-free by joining Audible. This is Martha Stewart, the Homemaker Hustler, Part 1. I'm Sachi Cole. And I'm Sarah Hagey. If you have a tip for us on a story that you think we should cover, please email us at scamfluencers at Wondery.com. And a reminder that our Scamfluencers merch store is live at Wonderyshop.com.

We use many sources in our research. A few that were particularly helpful were the New York Magazine article Living with Martha by Jeannie Cassendorf, the Vanity Fair article investigating Imclone, the New York Magazine article, Who New York Magazine article, Who New by Landon Thomas Jr. and Beth Landman Kiel. And the book, The Cell Game, Sam Wauxsell's Fast Money and False Promises,

and the fate of M. Clones cancer drug by Alex Prudum. Grace Berry wrote this episode. Additional writing by us, Sachi Cole and Sarah Haggy. Sarah Eni is our story editor and producer, and Eric Thurm is our story editor. Fact-checking by Will Tavlin. Sound design by James Morgan. Additional audio assistance provided by Adrian Tapia. Our music supervisor is Scott Velasquez for Frieson Singh.

Our coordinating producer is Desi Blaylock, and our managing producer is Matt Gant. Janine Cornelow and Stephanie Jenz are development producers. Our associate producers are Charlotte Miller. and Lexi Peary. Our producers are John Reed, Yasmin Ward, and Kate Young. Our senior producers are Ginny Bloom and Jen Swan. Our executive producers are Jenny Lauer Beckman, Marshall Louis, and Erin O'Flaherty for Wondry.