KMart Stock Scam

Do movies encourage people to engage in violent behavior? I don't know, but they can definitely encourage people to engage in stock scams.

Companies worry about whether their employess have their hands in the till. Then there's the scheme cooked up by former Kmart employee Eduardo Portero. The 20-year-old cashier used the company treasurer's signature found on one of his weekly paychecks to concoct a scheme to steal 1.9 million shares, or $145 million worth, of Kmart Holding Corp. stock. He very nearly pulled it off, duping two of the nation's largest banks, Wachovia and Citibank, along with EquiServe, the stock transfer agent for 1,300 U.S. companies.

Inspired by the 2002 movie Catch Me If You Can, says Ecarius, Portero got much of what he needed from the Internet at a site called, which sells do-it-yourself business forms. He downloaded a sample certificate of a corporate resolution, which is typically used to record an action taken by a company's board of directors. He then filled in a few fake sentences of legalese, which, in essence, gave James Gooch, who was then treasurer of Kmart Holding, widespread authority to dole out Kmart shares as he saw fit. To make it look official, Portero affixed a phony raised seal of Kmart Holding, using an $8 stamp. Portero then forged Gooch's signature on several transfer-of-ownership forms.

On the upside, this kind of behavior may get him a job offer from some Wall Street firms – once he is out of jail.

  • Paul Roberts

    kmart took advantage of hard working people,took me for about 2o,ooo dallars.