By  on July 28, 2005

BOSTON — Wal-Mart Stores Inc. filed a civil lawsuit Wednesday seeking to legally void the retirement package of Thomas Coughlin, the company's retired vice chairman and a former board member who is being investigated for alleged fraud in spending as much as $500,000 in Wal-Mart funds.

An Arkansas grand jury is probing whether Coughlin misspent the money through a string of phony expense reports and stolen gift cards.

Coughlin's attorney, William Taylor 3rd, said the suit by the world's largest retailer was "another step in its relentless campaign to discredit a man who dedicated his life to the company and its employees for 27 years. Wal-Mart has used its unlimited resources to mount an attack on Mr. Coughlin while denying him any meaningful opportunity to defend himself."

Coughlin, he added, "did not seek or obtain any improper reimbursements."

Wal-Mart spokesman Marty Heires declined comment.

The lawsuit, filed in Benton County Circuit Court, details a litany of allegedly fraudulent purchases, including airplane tickets, snakeskin boots, Bloody Mary mix and sunflower seeds, the Associated Press reported.

Coughlin resigned from the board of Bentonville, Ark.-based Wal-Mart in March after an internal investigation revealed the alleged financial improprieties. In April, Wal-Mart suspended Coughlin's retirement benefits, stripping him of 186,407 shares of restricted stock and 302,503 stock options, worth more than $20 million. Coughlin also lost a $1.03 million annual base salary that would have continued until 2007 under terms of a non-compete agreement.

Coughlin started in Wal-Mart's store security operations in 1978, eventually working his way up to vice chairman, the company's second-in-command. He worked with company founder Sam Walton and was a trusted lieutenant of the current chief executive officer, Lee Scott. Coughlin's compensation last year was more than $6 million.

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