15 November 2005 – LAWFUEL – Securities, law, legal, law firm news – Marcos Daniel Jiménez, United States Attorney for the Southern District of Florida; and Michael S. Clemens, Special Agent in Charge, Federal Bureau of Investigation, announced today that a grand jury sitting in Miami, Florida has indicted defendant, Eduardo A. Portero, a former Kmart employee, with four (4) counts of mail fraud in violation of Title 18, United States Code, Sections 1341, 1349, and 2, and four (4) counts of securities fraud in violation of Title 18, United States Code, Sections 1348 and 2, in connection with a $145 million stock swindle.
The Indictment alleges that Portero had been using a series of aliases in an attempt to obtain unauthorized transfers of the equivalent of approximately $145 million in KMart Holding Corporation (“KHC”) stock. Using the names Carmelo Almonte, Teonilo Alvarez, Emelino Padron, and Jose Barcelo, Portero sent forged, unauthorized Kmart corporate resolutions and stock transfer forms requesting the transfer of KHC stock from KHC to Portero (in his alias names). Portero received the stock and then opened online brokerage accounts at E*Trade Financial Securities in the alias names. He deposited the stock certificates and then promptly requested wire transfers of the proceeds from the sale of the stock.
If convicted of the charges, Portero faces a maximum statutory term of imprisonment of twenty-five (25) years on each securities fraud count and twenty (20) years on each mail fraud count. Portero also faces maximum statutory fines of up to $250,000 on each count.
EquiServe, a stock transfer agent for Kmart, issued the stock upon receipt of what appeared to be valid “Certificate of Corporate Resolutions” and “Transfer of Ownership Forms,” as they were accompanied by bank medallion guarantee stamps. These stamps, when presented to the Transfer Agent with the board resolutions, authorized the transfer, issuance, or redemption of the stock. EquiServe became suspicious when a package containing a stock certificate for several hundred thousand shares of KHC stock were returned as undeliverable due to Portero’s failure to list a specific apartment number on the Federal Express delivery form. Upon closer inspection, EquiServe noted that the three (3) stock requests were being delivered to that same apartment in Miami.
Mr. Jiménez commended the investigative efforts of the Federal Bureau of Investigation. This case is being prosecuted by Assistant United States Attorney Wilfredo Fernandez.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls