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BENTONVILLE, Ark. -- Tom Coughlin, the former vice chairman of Wal-Mart Stores Inc. here who admitted to stealing thousands of dollars from the retailer, was sentenced to 27 months of house arrest late last week.
Coughlin, who had joined Wal-Mart in 1978 in a key loss prevention role, was facing up to 28 years in prison and $1.35 million in fines after he pleaded guilty in January to wire fraud and tax evasion.
U.S. District Judge Robert T. Dawson in Fort Smith, Ark., said he took into consideration Coughlin's fragile health in sentencing him to home detention, five years probation and a $50,000 fine. Coughlin, 57, will also pay $411,218 in restitution to Wal-Mart and the U.S. government.
"I think it's clear Mr. Coughlin is an exemplary citizen who has risen to the top, but he has had a pretty spectacular fall," Dawson said before announcing his sentencing decision. The judge said further that in light of "the worldwide ridicule and embarrassment, the worst punishment may have already been administered" to Coughlin.
In a civil suit, Wal-Mart had accused Coughlin of wrongly claiming reimbursement for hundreds of thousands of dollars worth of items. In January, Coughlin pleaded guilty to five counts of wire fraud and a single count of failing to report income from the fraud on his 2000 federal tax return.
Coughlin was the retailer's second-ranking executive before he retired in January 2005. Coughlin's salary and bonus amounted to $3.9 million in 2005 and 2004, $3.2 million in 2003 and $1.8 million in 2002, according to data compiled by Bloomberg.
During the sentencing hearing, Coughlin said, "I'll never forgive myself for involving my subordinates," who he enlisted to help him falsely claim reimbursement for expenses and obtain company gift cards, prosecutors said. In February 2005, a Wal-Mart employee noticed that Coughlin used a gift card to buy contact lenses, sparking an internal probe.
Wal-Mart sued Coughlin in July 2005, seeking to revoke his multimillion-retirement package. A trial judge in Bentonville dismissed the suit last year, ruling that Wal-Mart and Coughlin agreed not to sue each other as part of the retirement agreement. Wal-Mart has appealed to the Arkansas Supreme Court.
Wal-Mart said it was pleased that the sentencing was completed, and noted that investigators had found no wrongdoing on the part of the company. "Our company's actions throughout this process have been consistent with our core values and the principle that all (employees) are held accountable to the same standard, regardless of their position," Wal-Mart said in a statement.