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Published: Friday, 1/27/2006

Report: Former Wal-Mart executive to plead guilty to fraud

ASSOCIATED PRESS

Former Wal-Mart Stores Inc. vice chairman Tom Coughlin will plead guilty in federal court Tuesday to defrauding the Bentonville, Ark., company and to not paying federal income tax on his ill-gotten gains, a person close to the case said today.

A member of Coughlin s legal team, speaking on condition of anonymity because the information is restricted by federal grand jury secrecy, said the former Sam Walton protege would appear in court Tuesday in Fort Smith, Ark.

Coughlin resigned from Wal-Mart, the world s largest retailer, last March when the company asked federal prosecutors to look into their allegations that he had tricked the company out of up to $500,000 over several years.

No details of the plea deal were available. Wal-Mart did not immediately return a telephone call seeking comment; company officials have previously declined to discuss the case.

In November, former Coughlin subordinate Robert E. Hey Jr. agreed to plead guilty to wire fraud and testify for the government in return for parole instead of prison time.

Documents in Hey s case did not identify the John Doe that Hey allegedly helped by filing fake expense reports and invoices.

However, the three alleged cases of fraud in the plea deal match up by date, dollar amount and recipient with allegations against Coughlin in a civil lawsuit filed by Wal-Mart.

Wal-Mart has accused Coughlin of funneling company funds into everything from alcohol to personal vehicles and gifts for his family over a period of several years.

Besides giving the case to federal prosecutors, Wal-Mart sued Coughlin last year to end Coughlin s retirement agreement and to recover money that Coughlin is accused of misusing.

However, that suit was dismissed this week by an Arkansas judge who said both sides had signed a pledge as part of that retirement deal not to pursue any claims against each other for any reasons.

Read more in later editions of The Blade and toledoblade.com.



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