PRESS RELEASE: JANUARY 07, 2006

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Former exec will plead guilty

The Washington Post

Former Wal-Mart Stores Vice Chairman Thomas Coughlin has agreed to plead guilty this month to five counts of wire fraud and one count of tax evasion, according to a source familiar with the case.

Government and defense attorneys have agreed that Coughlin would serve 27 months in prison, according to the source, who spoke on the condition of anonymity because the plea is still pending. The judge could give him a different sentence. The plea will be handled in Fort Smith, Ark.

Coughlin, who was the No. 2 executive at the company until January 2005, was ousted from the board in March over allegations of financial improprieties estimated to have cost up to $500,000. A six-week investigation prompted the company to fire three other employees. Jared Bowen, a former vice president who was fired, is suing the company, claiming that he was fired illegally in retaliation for blowing the whistle on Coughlin. The company said Bowen participated in the acts he challenged.

Wal-Mart's investigation focused on the alleged unauthorized use of corporate gift cards and suspect expense reports. The company said it reported the matter to the U.S. attorney for the Western District of Arkansas.

Robert Hey, a former Wal-Mart vice president who had reported to Coughlin, pleaded guilty to three counts of wire fraud in November, admitting that he manipulated invoices to embezzle money that was funneled "to a senior Wal-Mart executive."

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