Former Wal-Mart executive VP Thomas Coughlin fraudulently redeemed at least $6,800 in Wal-Mart gift cards for his own use, according to charges made by Wal-Mart Stores last week.
Coughlin is under investigation for misappropriating as much as $500,000 from Wal-Mart. He resigned in January, shortly before Wal-Mart’s internal investigation began, and was forced off Wal-Mart’s board of directors in March when Wal-Mart turned its investigation over to the U.S. Attorney General in (Xtra, March 29).
It’s unclear how much of the money was misappropriated through fraudulent use of gift cards; Coughlin also allegedly filed false invoices and travel and expense reports, which likely make up the bulk of the $500,000.
Wal-Mart outlined the details of Coughlin’s alleged gift card scheme in a letter to the Labor Department last week.
According to Wal-Mart, a sales clerk and a home-office staffer caught Coughlin when he tried to redeem gift cards earmarked for Wal-Mart’s All-Stars employee recognition program. Wal-Mart said that in May 2004, Coughlin requisitioned 51 gift cards ($100 each) for All-Star recipients.
Coughlin allegedly used the cards himself until January 2005, when he tried to use a card coded for All-Stars to buy contact lenses. The sales clerk called a worker in Wal-Mart’s Bentonville home office for help processing the card; the home-office staffer found it suspicious that a high-level exec would have earned such a card: “He was an unlikely recipient of a $100 gift card for top performers, and the contact lenses were not business supplies,” per Wal-Mart’s letter to the Labor Department.
Once alerted by the staffer, Wal-Mart began an internal investigation and tracked purchases made with cards issued to Coughlin. It details many purchases— board games and CDs to shotguns and liquor— its letter to the Labor Department. The letter also states that in November 2003, Coughlin requested 20 gift cards ($100 each) to hand out during store visits, but redeemed $1,700 of these himself.
Wal-Mart’s letter rebuts a claim filed earlier this month by former VP Jared Bowen, who said Wal-Mart fired him for blowing the whistle on Coughlin. Wal-Mart said Bowen colluded with Coughlin, giving him gift cards and approving obviously bogus expense reports.
“In collusion with a tight circle of confidants, Coughlin misappropriated hundreds of thousands of dollars over a period of years, using it to finance personal expenditures that included food, clothing, liquor, gifts, vacations, a customized hunting vehicle, customized dog kennels and a Texas hunting lease that cost the company $6,250 every six months,” per Wal-Mart’s letter to the Labor Department.
A grand jury investigation is underway.
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