DETROIT (AP) ? Federal authorities say a 20-year-old former Kmart employee used a rubber stamp, laptop computer, an old payroll cheque as well as accounts in Bermuda and Switzerland to hatch a stock-acquisition scheme that could have cost the Michigan retailer millions.

Eduardo A. Portero of Miami pleaded guilty to eight counts of federal securities and mail fraud this month, and could face about 12 years in prison, his lawyer said.

Portero set up dozens of bank and trading accounts in Bermuda, Switzerland and other foreign countries using numerous aliases, including Carmelo Almonte, Teonilo Alvarez, Emelino Padron, Jose Barcelo and Eric Porter, according to authorities.

In total, Portero sought $145 million in suburban Detroit-based Kmart Holding Corp. stock in three separate transactions, authorities said.

Authorities were tipped off when he forgot one key detail ? to include his apartment number in the address where he was to receive some of the stock certificates. It was after those certificates were returned as undeliverable that officials became suspicious.

His scheme, detailed in court filings by the FBI and federal prosecutors, appeared uncomplicated.

Using a document-creating Web site and an $8 rubber stamp that mimicked Kmart?s seal, he created what looked to be Kmart board resolutions giving him millions of dollars in stocks. To authorise the transfer, he forged the signature of a Kmart executive from an old payroll cheque.

Then he had Kmart?s stock transfer agent, EquiServe, transfer the shares.

University of Michigan finance professor H. Nejat Seyhun called Portero?s ruse ?ingenious,? and questioned how he did it.

?The only cheques and balances come from the board of directors, and he?s basically gotten past that,? Seyhun, author of a book on insider trading, told The Detroit News for a Sunday story. ?He discovered a perfect loophole in the system.?

EquiServe handles stock transactions for more than 1,300 firms, and according to the FBI, the company did not cheque with the Troy, Michigan retailer to ensure that the resolutions were real before issuing the stock certificates.

But when the 699,000 shares worth $53.8 million were returned to EquiServe in August after three failed delivery attempts to Portero?s home, the company became suspicious and contacted the FBI.

Less than two weeks later, EquiServe sent 992,782 shares to one of Portero?s aliases at his Miami apartment, and he deposited the stock certificate worth nearly $76 million in an investment account.

EquiServe rejected a third phoney resolution, and the FBI arrested Portero and searched his house in September. They found the phony Kmart corporate stamp and a journal that described the fraud in detail.

Portero?s lawyer, Daniel L. Ecarius, said Portero got the idea from surfing the Internet.

?(He) is from a generation that grew up around computers,? Ecarius said. ?He?s very intelligent and a good kid.?

Portero, who immigrated with his family from Cuba when he was 6, had no prior criminal record. He is to be sentenced April 8 in US District Court in Miami.