Tom Coughlin
Ex-Wal-Mart Exec Pleads Guilty to
Fraud
MARCUS KABEL / AP 31jan2006
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Former-Wal Mart
Stores Inc. vice chairman Tom Coughlin, right, enters the federal
courthouse in Fort Smith, Ark., with his wife before a hearing Tuesday,
Jan. 31, 2005. Coughlin is accused of misusing more than $500,000 in
company funds through fraudulent reimbursements. The former number two
executive at Wal-Mart is expected to enter a guilty plea to charges he
used company money to pay for his own hunting trips and luxury
purchases.
photo: AP
/April L. Brown |
|
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FORT SMITH, Ark. — A former Wal-Mart Stores Inc. vice chairman who was a protégé
of founder Sam Walton pleaded guilty to fraud and tax charges Tuesday, admitting
that he stole money, gift cards and merchandise from the world's largest
retailer.
Tom Coughlin, 57, pleaded guilty to five counts of wire fraud and one count
of filing a false tax return. The charges carry a maximum penalty of 28 years in
prison and a $1.35 million penalty, but prosecutors have likely recommended a
reduced sentence as part of a plea bargain.
The judge ordered a presentencing report that will take up to four months to
prepare.
Wal-Mart lawyers referred Coughlin to federal prosecutors after discovering
Coughlin had embezzled money from the company and used expense vouchers to buy
products as varied as snakeskin boots, hunting trips and Bloody Mary mix. They
estimated losses at up to $500,000.
In federal court, Coughlin spoke only when he was asked questions by U.S.
District Judge Robert Dawson. Afterward, defense lawyers issued a statement in
which Coughlin accepted responsibility for "serious personal mistakes in
judgment."
"This was not an easy decision. I regret the embarrassment this matter
has caused my family and friends and I thank them for their support, love and
friendship," Coughlin said in the statement.
In documents filed with the court, Coughlin specifically admitted defrauding
the company to pay for the care of his hunting dogs, lease a private hunting
area, upgrade his pickup truck, buy liquor and a cooler, and receive $3,100 in
cash.
As the company vice chairman, Coughlin received a base salary of $1.03
million in his final year with the company. A filing with the Securities and
Exchange Commission last April said Coughlin also received $3.09 million in
bonuses and other income in fiscal 2005. Coughlin held about $20 million in
Wal-Mart stock, according to an SEC filing last February.
The former executive said his guilty plea was in the best interest of his
family, friends and community. He remained a Wal-Mart cheerleader, asking
associates "to pull together in fulfilling Sam Walton's dream of creating
the world's greatest retailer."
Prosecutors recommended a sentence but Dawson sealed the plea agreement. The
judge said he was concerned that he read many of the plea deal's details in
newspapers before any documents were filed with his court.
Nothing was mentioned in court about restitution.
Wal-Mart spokeswoman Mona Williams said the ordeal has been
"embarrassing and painful."
"Someone we expected to operate with the highest integrity let us down
in a very public way. Wal-Mart has high ethical standards and the way we handled
this matter makes it clear that every associate will be held to these standards
with no exception," Williams said.
Coughlin retired as Wal-Mart vice chairman last year and gave up his spot on
the company board in March after Wal-Mart referred him to prosecutors. The
matter was taken up by a grand jury in Fort Smith.
In November, former Coughlin subordinate Robert E. Hey Jr. agreed to plead
guilty to wire fraud and testify for the government in return for parole instead
of prison time.
Besides giving the case to federal prosecutors, Bentonville, Ark.-based
Wal-Mart filed suit last year to end Coughlin's multimillion-dollar retirement
agreement and to recover money.
However, that lawsuit was dismissed by an Arkansas judge who said both sides
had signed a pledge as part of Coughlin's retirement deal not to pursue any
claims against each other for any reasons. Wal-Mart has said it will appeal the
dismissal of its lawsuit to the Arkansas Supreme Court.
According to filing of information that was filed with the plea, Coughlin
specifically admitted to:
- a travel expense voucher to pay $700 allegedly for travel and meeting
expenses, but which was actually for the care of Coughlin's hunting dogs;
- a false invoice for $6,500 to pay for a private hunting lease;
- a false expense statement to cover $2,695 for upgrades to his 1999 Ford
truck, which he claimed as reimbursement for meeting expenses;
- fraudulently obtained gift cards to pay for a cooler, two cases of
Smirnoff, two cases of Miller Light beer, a bottle of Jack Daniels, a carton
of tequila, and other items from a Sam's club in Joplin, Mo.
- a false invoice to receive a check for $3,100 that was cashed and the
funds provided back to Coughlin for his personal use;
- a false tax return.
No mention was made in court of Coughlin's claim that he used money obtained
from Wal-Mart to pay for anti-union activism. Wal-Mart has said there is no such
project.
source: http://www.washingtonpost.com/wp-dyn/content/article/2006/01/31/AR2006013100541.html
1feb2006
