Detroit, MI, Feb. 13--The Securities and Exchange Commission has dropped its accounting fraud case against two former Kmart Corp. executives, a lawyer for one of the men said Thursday.
The SEC had filed its civil action against Enio A. "Tony" Montini Jr. and Joseph Hofmeister in addition to criminal charges, which a judge dismissed at trial in November after federal prosecutors in Detroit decided they didn't have enough evidence.
Montini's lawyer, Jonathan Graham, said U.S. District Judge Paul Borman dismissed the case at the SEC's request on Tuesday. Graham said he received notification on Thursday.
The charges stemmed from a federal probe into Kmart's decline into bankruptcy and were part of a government crackdown on accounting fraud.
The government claimed that Montini and Hofmeister conspired to inflate Kmart's earnings in the second quarter of 2001 by improperly recording a payment.
The criminal case was dismissed after just two government witnesses testified.
