Officials Say Retired Officer Lied About 9/11 Injuries

Coughlin still has the Purple Heart, and the honors are not under review by the Navy, officials said.

In the lawsuit, filed last month at the federal courthouse in Washington, prosecutors raised no questions about Coughlin's actions during the Pentagon attack. Instead, they challenged the account of injuries that he submitted to the compensation fund, which distributed payments to more than 7,400 recipients.

Channing Phillips, a spokesman for the U.S. attorney's office, declined to comment on the lawsuit or reveal what led to the probe.

Coughlin filed the application in 2004, just before the fund was about to shut down, said Walter Laake, the lawyer who helped him submit the papers. "I asked him why he waited for so long, and he said he felt very bad that he survived and others didn't," Laake recalled in an interview. "He felt terrible."

"I thought this guy was a hero, he was what you would think of when you think of an officer in the armed forces -- forthright, intelligent," Laake said. "The allegation of what he was supposed to have done was so out of character from what I was exposed to."

In his application, according to prosecutors, Coughlin stated that he was "struck on the head by falling debris" and that, when he ran back in, he hit his head on what he thought was a door.

Coughlin used medical terminology to describe injuries to his neck. But prosecutors allege that he simply duplicated the language that a doctor invoked to diagnose him in 1998. Coughlin, according to the prosecutors, had "a history of neck and shoulder ailments predating September 11, 2001, including an injury as early as 1978 to his left shoulder."

According to prosecutors, Coughlin asserted that his life had changed "substantially" since 2001. "I no longer run marathons," the commander wrote, "ceased playing lacrosse last season after one game, and avoid playing basketball to any degree since I am a 'lefty' shooter.' "

But prosecutors contend in the lawsuit that Coughlin ran the marathon in New York in November 2001, that he "injured his left index finger" playing basketball and that he joined "a number of lacrosse games."

The compensation fund denied Coughlin's first application in February 2004. Two weeks later, Laake appealed the decision, sending more medical records. The compensation board then reversed its decision and awarded $60,000.

But Coughlin appealed the ruling again, according to prosecutors. At a hearing in May 2004, Coughlin cited several examples of services he had to pay for as a result of his injuries, including $230 for window washing. Yet prosecutors claim that Coughlin's banking records indicate that at least one check he cited was used to pay the "Severn River Swim Club."

After a hearing, the compensation board in June of 2004 increased his award to $331,034 -- including $151,034 for economic losses.

Six months later, prosecutors say, Coughlin used at least $200,000 of the money to buy his home, a 4,200-square-foot brick house with four bathrooms and a three-car garage.

Coughlin also used the money to pay off loans he had taken out to pay for the 2002 Mercedes-Benz and a 2002 Honda Odyssey. The government has taken the vehicles pursuant to a seizure warrant, which is approved by a judge. Prosecutors want the court's permission to seize them permanently.

Staff researcher Meg Smith contributed to this report.