By  on April 25, 2005

BOSTON — Moving swiftly, a federal grand jury has started investigating allegations that Wal-Mart former vice chairman Thomas Coughlin fraudulently spent as much as $500,000 in company funds.

A Wal-Mart spokeswoman confirmed the probe on Friday, but declined further comment. The world’s largest retailer, based in Bentonville, Ark., last month turned over findings of an internal investigation to the U.S. Attorney’s office for western Arkansas.

Zuckerman Spaeder LLP, the Washington law firm representing Coughlin, did not return a call seeking comment. A spokesman in the U.S. Attorney’s office declined to comment.

Coughlin, who retired in December, resigned from Wal-Mart’s board when the inquiry was disclosed last month. In addition, the firm stripped Coughlin of 186,407 shares of restricted stock and 302,503 stock options pending the investigation.

Steven Wisebram, a former federal prosecutor now specializing in white collar crime with Atlanta law firm Finch McCranie, said it is standard protocol to refer such matters to an outside agency, such as the FBI, to investigate. A grand jury can be convened simultaneously to begin reviewing documents and hearing witness testimony. It would be unlikely for Coughlin to testify at this stage, he said.

Wisebram called the timing “very rapid,” in his experience, but noted that it may simply be a function of a relatively light caseload in western Arkansas.

The Wall Street Journal this month reported that Coughlin told Wal-Mart employees the money was being used to pay for information on pro-union workers in stores. Wal-Mart has denied the allegation.

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