Thomas M. Coughlin

Tom Coughlin, a former Wal-Mart Stores Inc. executive, passed away on Friday at the age of 66.

Coughlin was once the number-two executive at the retail giant, and a protégé of founder Sam Walton. His career was marred by an embezzlement scandal that resulted in his resignation, and which also led to him pleading guilty to five counts of wire fraud and one count of tax evasion.

Chief executive officer Doug McMillon said in a note to company executives on Friday: “Our hearts go out to the family of Tom Coughlin, who passed away earlier today. Like me, many of you worked with Tom over his more than 26 years with the company.” In the note, which Wal-Mart provided to WWD, McMillon also said, “I know firsthand how much he loved our associates and this company.”

Coughlin, born in Cleveland, began his retail career working for Macy’s Inc. and moved on to a Cleveland-based chain called Cook’s Stores. Walton hired him away from Cook’s, where he started in the security division for Wal-Mart in 1978. He worked his way up to become head of the U.S. retail division and eventually vice chairman. Coughlin was a hunting buddy of Walton’s and was known as a tough boss that required managers to stand at his meetings.

His solid career at Wal-Mart came to an end when he resigned from the company in March 2005 over charges he embezzled $500,000. Coughlin said he used the funds to reimburse himself for secret efforts to thwart unions. Wal-Mart has consistently resisted employee unions.

After Coughlin pled guilty to charges in 2006, the former vice chairman was sentenced to 27 months of house arrest, five years probation and ordered to pay $460,000 in fines and restitution. He went on to start a consulting business, Tom Coughlin & Associates, whose clients included Wal-Mart executives.

Surviors include his wife, three children, a grandson, a brother and four sisters. According to the Stockdale Funeral Home, the service will be held at St. Stephens Catholic Church in Bentonville, Ark., on April 9.