Gen. William "Kip" Ward, the first four-star general to command U.S. military operations in Africa, will lose one star and retire as a lieutenant general, the Pentagon announced Tuesday.
The Army also wants $82,000 back from the officer, the statement said.
Investigators found Ward used his rank as a four-star general to shuttle his wife on shopping sprees, enjoyed a lavish beachfront trip and once accepted a defense contractor's gift of going backstage to meet actor Denzel Washington.
Secretary of Defense Leon Panetta stripped Ward of a star, sending him to the last rank at which it is believed he served honorably.
"Secretary Panetta insists that leaders within the Department of Defense exemplify both professional excellence and sound judgment," the statement said.
Ward will retire at the lower rank, and consequently a lower pay grade. Retirement pay varies widely depending on years of service, but many four-star generals receive well over $100,000 a year.
Since leaving Africa Command in April 2011, Ward has worked as special assistant to the Army vice chief of staff, serving as a two-star general. Under Army guidelines, a four-star who is not serving at that rank for 60 days is automatically demoted until the case is resolved.