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AUGUST 9, 2006 By Anita French The Morning News Coughlin Faces Sentencing Friday Tom Coughlin, former Wal-Mart vice chairman, often stood on a stage to address a large crowd of admiring followers at the company's shareholders meetings during his 28-year-career with the world's largest retailer. On Friday, Coughlin will stand before a federal judge in Fort Smith and hear his sentence for defrauding the company he was once considered a candidate to lead. Coughlin, 56, pled guilty Jan. 31 in U.S. District Court in Fort Smith to five counts of wire fraud and one count of filing a false income tax return. Once considered by some to be a successor to late founder Sam Walton, Coughlin resigned from Bentonville-based Wal-Mart Stores Inc. in March 2005 after an internal investigation revealed his misuse of company gift cards and invoices in an amount Wal-Mart said totaled around $500,000. Coughlin will appear before Judge Robert T. Dawson in U.S. District Court in Fort Smith. He faces up to 28 years in prison and a $1.35 million fine, but one legal expert predicted he would receive a much lighter sentence. "I expect him to get some kind of prison sentence and would bet a year to 18 months. Even in that range (of $500,000 dollar loss), more than two years would be unlikely," said Peter Henning, a law professor at Wayne State University in Detroit and a former attorney with the U.S. Department of Justice. Henning also said Coughlin will be forced to pay a fine because restitution is mandatory in this kind of case. Coughlin admitted in his plea that he obtained fake expense vouchers and invoices and had checks and Wal-Mart gift cards issued for his own use. The money Coughlin illegally obtained was transmitted by wire and other electronic communications from Wal-Mart facilities in Arkansas and Missouri to a bank in North Carolina, according to court documents. Coughlin also admitted that, on or before April 15, 2001, he filed an individual tax return stating his taxable income was $1.67 million, when the real amount was substantially more, according to court documents. Coughlin's attorneys could ask for home detention for their client because of his medical problems. Coughlin suffers from a heart condition and has been admitted to the hospital at least twice in recent years. But Henning said home detention was not likely in this case. "It would have to be a very significant medical condition," he said. "You get that (plea) with older defendants in the white collar area ... and it tends not to be a very strong argument, certainly not for home detention. The federal system has pretty good medical care - not great, but good." Coughlin and his wife, Cynthia, have put their Centerton home on the market and reportedly moved to an undisclosed location in the area. The sale of their former home is being handled by Century 21, which has it listed at realtor.com for $663,000. The 4,000-square-foot, four-bedroom, three-bath house sits on seven acres, according to the listing. Prosecutors usually file a presentencing recommendation with the court, but it has been sealed in Coughlin's case, as have details of his plea agreement with the government, said Bill Cromwell, a spokesman for the U.S. attorney's office in Fort Smith. "The U.S. attorney usually agrees to any sentence that is within the guideline range as a reasonable sentence," Cromwell said Wednesday. Judge Dawson ordered the plea agreement to be sealed and any comment would have to come from his office, Cromwell said. Douglas McNabb is a well-known Houston attorney specializing in high-profile, white-collar federal crime cases. Both he and Henning said it was unusual for a plea agreement to be sealed. "That means there's something in there they don't want you to see - typically, because it contains information that would perhaps impede government investigation of others," McNabb said. U.S. Attorney Bob Balfe in Fort Smith e-mailed a news release Wednesday, saying his office and agents with the FBI and IRS will hold a press conference following Coughlin's sentencing to answer questions about the investigation. Former Wal-Mart executive Robert Hey, 43, of Garfield, was sentenced in June to one day in prison and six months of supervised release and also fined $3,000 for wire fraud convictions connected to the Coughlin case. A former vice president who worked under Coughlin, Hey was fired by Wal-Mart in December 2004 and pled guilty to three counts of wire fraud last year. Prosecutors said Hey wrote fake vouchers to get money and Wal-Mart gift cards for Coughlin. Hey agreed to testify against Coughlin as part of a plea agreement. If Coughlin is sentenced to prison, where he serves his term is up to the Federal Bureau of Prisons, Cromwell said. The Bureau usually takes several weeks to make its decision, taking in consideration such issues as available space, proximity to the inmate's family, security and the inmate's medical condition, Henning said. The Bureau of Prisons, after making its decision, will send a letter to Coughlin telling him where to turn himself in. Only then would he and the public find out the facility where his sentence will be served, Cromwell said. McNabb said Coughlin would qualify for what has been called "Club Fed." "It is a (federal) camp with the lowest security level prisons have. I call it a college dormitory without bars," McNabb said. The closest federal prison camp to Arkansas seems to be in Bryan, Texas, although the Bureau of Prisons has other inmate facilities in Arkansas and surrounding states listed at its Web site. There is a federal correctional complex in Forrest City, a medical center for federal prisoners in Springfield, Mo., and a federal correctional institution in Texarkana, Texas at the Arkansas-Texas border. McNabb said federal camp inmates usually have a job, normal sleeping accommodations and free time. He had one client serving time at a federal camp whose job was to take care of the golf course, McNabb said. Coughlin would have to receive a sentence of at least a year and a day to be released from prison in less than a year, Henning said. He also would have a period of supervised release after that, he said. McNabb, who argued a case in Judge Dawson's court the day before Coughlin pled guilty, said Dawson always tries to do "the right thing" in his decisions. "You may not like what his decision is, but you can be assured that he will think that he did the right thing. Frankly, in federal criminal proceedings, that's about as much as you can ask for," McNabb said. | |