The TV icon and business mogul spoke with ET at The Hollywood Reporter's 9th Annual Most Powerful People In Media gala event at The Pool in New York City on Thursday, and she addressed the fraud scandal and Huffman's involvement.
"It's just embarrassing for a family to go through what they're going through and horrifying that it even occurred," Stewart shared. "It's a sad thing."
Huffman pleaded guilty to charges of mail fraud and honest services mail fraud on Monday, and issued a public apology for "the pain I have caused my daughter, my family, my friends, my colleagues and the educational community."
However, Stewart said she feels that Huffman "definitely" will have an opportunity to bounce back and rebuild her career after the dust settles.
Considering Stewart's own legal drama in the past -- including serving a five-month sentence in a federal corrections facility from 2004 to 2005 after being convicted of multiple felony charges -- the iconic lifestyle guru and businesswomen certainly knows what it's like to have to rebuild, and that it's possible.
Stewart also addressed the sheer number of wild, dramatic and unexpected Hollywood news stories that have broken in recent months -- most notably the admissions scandal and the ongoing Jussie Smollett drama.
"That's showbiz! You can't make it up," she said with a laugh. "I can't even read fiction because real [life] is better than any fiction."
Stewart's comments come just days after Huffman's plea, and the US Attorney's recommendation of incarceration at the low end of the sentencing guidelines, a fine or other financial penalty of $20,000 and 12 months supervised release for Huffman, as well as 12 other individuals who also pleaded guilty.
For the latest news on the ongoing admissions scandal, check out the video below.