Middletown Sears Owner Admits to Defrauding Company of $154,000

A 53-year-old South Kingstown man and a former franchisee of a Sears Hometown and Outlet in Middletown pleaded guilty in federal court in Providence today to defrauding Sears of more than $154,000.

Joseph Kilty admitted to the court that between January of 2012 and June of 2013, he deposited $154,120 in cash receipts into personal bank accounts instead of a required Sears bank account.

As part of the scheme, Kilty faked documents to make it look like he did make the deposits, including 47 fraudulent deposit slips and several fake bank reconciliation forms.

Kilty also admitted to making to fake bank checks in the amount of $99,000 and $28,319.75 payable to Sears Hometown and Outlet, giving them to a Sears district manager. Those checks were mailed to the Sears Hometown and Outlet office in Hoffman Estates, Illinois.

Kilty's guilty plea to one count of mail fraud was announced by United States Peter F. Neronha along with agents from the U.S. Postal Inspection Service's Boston division and the Federal Bureau of Investigation.

Kilty will be sentenced before Judge William E. Smith on Sept. 18. 

The penalty for mail fraud is up to 20 years of prison and a fine of up to $250,000 or twice the the gross gain or loss resulting from the offense, whichever is greater.

He could also face up to five years of supervised release.