The defendant stated that she was, "not guilty."

is this correct punctuation?

No.

Use ONE of the following, but no combination of the two!

The defendant stated that she was not guilty.

The defendant stated, "Not guilty."

The defendant stated, "Not guilty."

Yes, the punctuation in the sentence you provided is correct. The statement made by the defendant, "not guilty," is enclosed in quotation marks. This is the appropriate way to indicate direct speech or a verbatim statement made by someone. The comma placed after the words "she was" is also correct. When a quotation is integrated into a sentence, as in this example, a comma is used to separate the quoted words from the rest of the sentence.