Case Dropped Against Former Kmart Execs

The U.S. government dropped securities fraud charges against two former Kmart Corp. vice presidents after prosecution witnesses said the men might not have concealed information or violated company accounting policies.

The charges against Enio Montini Jr. and Joseph Hofmeister stemmed from a $42.3-million payment American Greetings Corp. made to Troy, Mich.-based Kmart in June 2001 to ensure exclusive shelf space for greeting cards. Prosecutors had accused the two of concealing a side letter that granted American Greetings a partial refund under certain circumstances.