White Collar Crime

8th Circuit: Resentence Wal-Mart Exec

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A federal judge may have been too lenient in sentencing a former Wal-Mart Stores Inc. executive to five years of probation (including about two years of home confinement) in a $500,000 fraud case, an appeals court has ruled. It says Tom Coughlin must be resentenced.

A 28-year employee who rose to Wal-Mart’s No. 2 job before retiring in 2005, Coughlin was accused of, as the Associated Press puts it, “using Wal-Mart money and gift cards to pay for about $500,000 in personal items that ranged from hunting trips and hunting dog training to clothes, alcohol and work on his car.”

He pleaded guilty in 2006 to six felony charges: filing a false tax return and five counts of aiding and abetting wire fraud. Besides probation, his sentence included a $50,000 fine and $411,218 in restitution. Coughlin, whose net worth is estimated at $50 million, is allowed to leave his home for medical appointments and church.

U.S. District Judge Robert T. Dawson cited Coughlin’s age (58), his bad health and his community service as reasons for a relatively light sentence, but a divided panel of the St. Louis-based 8th U.S. Circuit Court of Appeals disagreed. Dawson’s eight-level departure from sentencing guidelines “does not fall within the range of reasonableness,” wrote Judge William Jay Riley in the court’s opinion (PDF).

“Perhaps Coughlin’s family ties and station in the community, as well as his lofty corporate position of trust and power, exacerbate the nature of his crimes,” Riley writes, saying that the record doesn’t show that aggravating factors were weighed.

A dissenting judge said the sentence was justified by Coughlin’s “extraordinary physical impairment.” He has a high-risk heart condition, and being imprisoned, according to medical experts, “may well cause his death,” writes Chief Judge Kermit Edward Bye.

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