Fed Probe of Former Kmart Execs Dropped

Detroit, MI, October 11, 2005--Federal prosecutors will not charge former executives of Kmart Corp., including former chairman and chief executive Charles Conway for their roles in events leading up to the discount retailer's 2002 bankruptcy, the Detroit News reported on Tuesday. The newspaper said that the decision, which also lifts charges against Kmart's former president, Mark Schwartz, caps a multimillion-dollar and 3-1/2-year Federal Bureau of Investigation and Justice Department probe into allegations that corporate wrongdoing caused the largest retail bankruptcy filing in U.S. history. Kmart, which emerged from bankruptcy in 2003, has since acquired Sears, Roebuck and Co., and the combined company is called Sears Holdings Corp. A Sears Holdings spokesman declined to comment. While the newspaper said the investigation generated dozens of allegations, hundreds of hours of interviews and millions of pages of documents, no significant evidence of personal fraud by senior executives emerged. The decision to decline prosecution came at a Sept. 30 meeting of FBI officials and federal prosecutors in Detroit, the newspaper said.