FORT SMITH, Ark. — A former top-ranking executive at Wal-Mart Stores Inc. pleaded guilty to fraud and tax charges Tuesday, admitting that he stole money, gift cards and merchandise from the world's largest retailer.
Tom Coughlin, 57 and once a protege of Wal-Mart founder Sam Walton, faces a maximum of 28 years in prison after pleading guilty to five counts of wire fraud and one count of filing a false tax return. He also could be fined $1.35 million.
The judge ordered a presentencing report that will take up to 14 weeks to prepare.
Wal-Mart lawyers referred Coughlin to federal prosecutors after discovering Coughlin had embezzled money from the company and used expense vouchers to buy products as varied as snakeskin boots, hunting trips and Bloody Mary mix. They estimated losses at up to $500,000.
In federal court, Coughlin spoke only when he was asked questions by U.S. District Judge Robert Dawson. Afterward, defense lawyers issued a statement in which Coughlin accepted responsibility for "serious personal mistakes in judgment."
"This was not an easy decision. I regret the embarrassment this matter has caused my family and friends and I thank them for their support, love and friendship," Coughlin said in the statement.
The former vice chairman of Wal-Mart said his guilty plea was in the best interest of his family, friends and community. He remained a Wal-Mart cheerleader, asking associates "to pull together in fulfilling Sam Walton's dream of creating the world's greatest retailer."
Prosecutors recommended a sentence but Dawson sealed the plea agreement. The judge said he was concerned that he read many of its details in newspapers before any documents were filed with his court.
Wal-Mart spokeswoman Mona Williams said the ordeal has been "embarrassing and painful."
"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 exception," Williams said.
"We are grateful to the U.S. attorney, his staff and the FBI and IRS agents who spent countless hours making sure that every aspect of this matter was thoroughly investigated and that the responsible people were held accountable for their actions," Williams said.
Coughlin retired as Wal-Mart vice chairman last year and gave up his spot on the company board in March after prosecutors referred him to prosecutors. The matter was taken up by a grand jury in Fort Smith.
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.
Besides giving the case to federal prosecutors, Wal-Mart sued Coughlin last year to end Coughlin's multi-million-dollar retirement agreement and to recover money that Coughlin had now admitted stealing.
However, that lawsuit was dismissed by an Arkansas judge who said both sides had signed a pledge as part of Coughlin's retirement deal not to pursue any claims against each other for any reasons. Wal-Mart has said it will appeal the dismissal of its lawsuit to the Arkansas Supreme Court.