BOSTON - Former Wal-Mart vice chairman Thomas Coughlin pleaded guilty today to five counts of federal wire fraud and one count of tax evasion stemming from the theft of as much as $500,000 in company funds.
Coughlin had a subordinate prepare phony expense reports and third-party invoices for a fraud that Wal-Mart estimated was as much as $500,000. He also obtained company gift cards under false pretenses and used them for personal purchases. The former second-in-command maintained his innocence for months, claiming the reimbursements were part of a secret scheme to spy on unions.
Coughlin faces as much as five years prison and a $250,000 fine for each fraud count. The tax evasion charge carries a potential of three years in prison and a $100,000 fine.
Wal-Mart turned over evidence of internal theft involving Coughlin to a grand jury last March. The world's largest retailer today issued a statement condemning Coughlin's actions.
"This whole episode has been embarrassing and painful to us as a company and as individuals," said Wal-Mart spokeswoman Mona Williams. "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 exceptions."
Coughlin issued a statement saying he "accepted responsibility for serious personal mistakes in judgment." He also called on Wal-Mart¹s rank-and-file to "pull together in fulfilling Sam Walton's dream of creating the world's greatest retailer."
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