Former Wal-Mart Boss Sentenced to 27 Months of Home Detention

FORT SMITH, Ark. – Former No. 2 Wal-Mart Stores Inc. (WMT) executive Thomas Coughlin, who pleaded guilty to stealing money, merchandise and gift cards from the retailer, was sentenced Friday in federal court to 27 months of home detention and five years probation.

Coughlin, 57, avoided any prison time, but was sentenced to a $50,000 fine and $400,000 in restitution.

Prosecutors had asked for Coughlin to serve six months to a year in prison, but U.S. District Judge Robert Dawson agreed with a doctor who testified that Coughlin's health was too poor for the former Wal-Mart executive to enter prison.

Coughlin pleaded guilty in January to stealing items from Wal-Mart worth just a fraction of the millions of dollars he earned in salary, bonuses and stock options.

Dawson said Coughlin had already been punished by the publicity surrounding the case and the possibility of losing his retirement benefits in a pending civil lawsuit filed by Wal-Mart.

Coughlin had faced a maximum of 28 years in prison on five counts of wire fraud and one count of filing a false tax return. He could also be fined as much $1.35 million.

Dr. Joel Carver of Northwest Arkansas Heart and Vascular Center told U.S. District Judge Robert Dawson that Coughlin suffers from pulmonary hypertension, diabetes and sleep apnea. Dr. Carver said prison life would be life-threatening for Coughlin because of those conditions.

Prosecutors were expected to present their arguments after a short break in the morning hearing.

Wal-Mart referred Coughlin to federal prosecutors after alleging he took money, goods and gift cards worth up to $500,000 over a period of at least seven years before he retired in early 2005.

Coughlin retired as Wal-Mart vice chairman in January 2005 and gave up his spot on the company board in March 2005 after Wal-Mart referred him to prosecutors. The matter was taken up by a grand jury in Fort Smith.

In court in January, 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. The items were worth a minuscule amount when compared to his $1 million-plus salary.

Coughlin's lawyers did not immediately return a phone call asking for comment ahead of the sentencing. Wal-Mart has declined to comment on specifics of the case.

Wal-Mart referred Coughlin to federal prosecutors after alleging he took money, goods and gift cards worth up to $500,000 over a period of at least seven years before he retired in early 2005.

Wal-Mart made further allegations of embezzlement and theft in a separate civil lawsuit it filed last year seeking to revoke Coughlin's multimillion dollar retirement package.

That suit alleges that Coughlin used tricks including false expense reports to buy things as varied as snakeskin boots, hunting trips and Bloody Mary mix.

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 appealed the dismissal of its lawsuit to the Arkansas Supreme Court.

No mention was made in Coughlin's public filings with the court of his earlier claim that he used money obtained from Wal-Mart to pay for anti-union activism. Wal-Mart has said there was no such project.

Coughlin retired as Wal-Mart vice chairman in January 2005 and gave up his spot on the company board in March 2005 after Wal-Mart referred him to prosecutors. The matter was taken up by a grand jury in Fort Smith.

As vice chairman, he received a base salary of $1.03 million in his final year with the company. He received more than $3 million in bonuses and other income in the same period and held about $20 million in Wal-Mart stock, according to Securities and Exchange Commission filings.