The Associated Press
Friday, August 11, 2006; 6:06 PM

FORT SMITH, Ark. -- A former No. 2 Wal-Mart executive who began his career as the company's theft prevention chief was sentenced Friday to 27 months in home detention after pleading guilty to stealing money, merchandise and gift cards from the retailer.

Thomas Coughlin, 57, avoided any prison time, but was ordered also to serve five years probation, and pay a $50,000 fine and about $411,000 in restitution to Wal-Mart Stores Inc. and the Internal Revenue Service.

Prosecutors had asked for Coughlin to serve six months to a year in prison, but U.S. District Judge Robert Dawson agreed with a doctor who testified that Coughlin's health was too poor for him to enter prison.

Coughlin pleaded guilty in January to stealing items from the world's largest retailer that were worth just a fraction of the millions of dollars he earned in salary, bonuses and stock options.

"There is no excuse for my conduct," Coughlin said during the hearing.

Dawson said Coughlin had been an exemplary citizen before this case and had already been punished by the surrounding publicity. Dawson also noted that Coughlin still faces the possibility of losing his retirement benefits if Wal-Mart succeeds with a civil lawsuit that is currently under appeal.

"It has been a spectacular fall," the judge said in sentencing Coughlin.

Wal-Mart said it was pleased that the case was concluded and noted that U.S. Attorney Robert Balfe told reporters the investigation had found no evidence backing Coughlin's earlier claims that the money he took was reimbursement for unspecified anti-union activities.

Wal-Mart has denied there was any anti-union project headed by Coughlin.

"U.S. Attorney Balfe confirmed that the government thoroughly investigated Mr. Coughlin's claims and found no wrong doing on the part of the company," Wal-Mart said in a statement after the sentencing.

"Our company's actions throughout this process have been consistent with our core values and the principle that all associates are held accountable to the same standard, regardless of their position," Wal-Mart said.

Coughlin appeared to revive those allegations of anti-union work in comments to reporters outside the courthouse after he was sentenced.

"It is obvious that the activity that I was involved in had gone on for a number of years and was in fact acknowledged by members of management even though they did not know the specific details," he said, reading from a written statement. He did not take questions and did not elaborate.

WakeUpWalMart.com, a union-backed campaign group critical of Wal-Mart, said Coughlin's words raised "serious and troubling questions" about possible anti-union activities.

Coughlin had faced a maximum of 28 years in prison on five counts of wire fraud and one count of filing a false tax return and fines up to $1.35 million.

Dr. Joel Carver of Northwest Arkansas Heart and Vascular Center told U.S. District Judge Robert Dawson that Coughlin suffers from pulmonary hypertension, diabetes and sleep apnea. Dr. Carver said prison life would be life-threatening for Coughlin because of those conditions.

Wal-Mart referred Coughlin to federal prosecutors after alleging he took money, goods and gift cards worth up to $500,000 over a period of at least seven years before he retired in early 2005.

Coughlin, who joined Wal-Mart in 1978 as head of theft prevention, retired as vice chairman in January 2005 and gave up his spot on the company board in March 2005 after Wal-Mart referred him to prosecutors. The matter was taken up by a grand jury in Fort Smith.

In court in January, Coughlin specifically admitted defrauding the company to pay for the care of his hunting dogs, lease a private hunting area, upgrade his pickup truck, buy liquor and a cooler, and receive $3,100 in cash. The items were worth a total of $14,395.

As vice chairman, he received a base salary of $1.03 million in his final year with the company. He received more than $3 million in bonuses and other income in the same period and held about $20 million in Wal-Mart stock, according to Securities and Exchange Commission filings.

Wal-Mart made further allegations of embezzlement and theft in a separate civil lawsuit it filed last year seeking to revoke Coughlin's multimillion dollar retirement package.

That suit alleges that Coughlin used tricks including false expense reports to buy things as varied as snakeskin boots, hunting trips and Bloody Mary mix.

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 appealed the dismissal of its lawsuit to the Arkansas Supreme Court.