"The FBI is looking at the situation at Kmart to determine any possible violations for criminal prosecution at a later time," FBI agent Dawn Clenney said, declining further comment.

Earlier this month Kmart revealed it will review possible wrongdoing by former executives. The company suspended all loans and severance payments to 70 top senior executives, many of which no longer work for the company.

The Securities and Exchange Commission began investigating Kmart's accounting practices in January after an anonymous letter, purportedly by employees, raised questions about the company's accounting practices.

The troubled retailer Wednesday restated its 2001 fiscal earnings to report a net loss of $2.42 billion compared withits originally reported loss of $244 million.

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