Last Tuesday, a civil document was filed in U.S. Southern District Court alleging Natalie Cochran and her late husband Michael used two government contractor businesses to scam investors of at least $2.8 million in a Ponzi scheme.
The next day, Cochran, a pharmacist from Daniels, filed for Chapter 7 bankruptcy, listing assets of $397,000 with liabilities of $1.4 million.
Chapter 7 allows for the sale of a debtor's property and the distribution of the proceeds to creditors, according to uscourts.org.
Cochran's petition for bankruptcy states that her debts are "consumer debts," meaning they were incurred for personal, family or household purposes.
Cochran listed $89,000 in wages from 2017 and a self-employed salary of $200,000 in 2018. She listed her current monthly income as $502 in food stamps.
Although her employment status on the filing was listed as "employed," no information was listed about her current occupation, employer's name or employer's address. Her income was listed as $0.
Cochran's assets were recorded in the filing at $397,005, including a single family home located 433 4H Lake Rd. in Daniels, valued at $302,600; a 2016 Mercedes-Benz GLE 350 D 4Matic, valued at $37,500; a 2014 GMC 3500 HD Denali, valued at $32,000; and two investment properties in Daniels, valued at a combined $18,900.
Collections suits have been filed in Greenbrier County and Raleigh County for the Denali and the Mercedes.
Cochran listed $500 in an American Electric Power "other financial account," $13.57 at a First Community Bank checking account, and $8 in a Bank of Mount Hope checking account. She listed $58 in "cash on hand."
Among the 29 creditors listed in the filing, Cochran estimated her liabilities at $1.4 million, including $445,000 to LCF Group (a financing firm), $250,000 to Premier Bankcard, nearly $134,000 in student loans, $81,621 to CAMC HFS (a health care collection service), $17,515 to Duke Health, $15,590 to Sunset Memorial Park, $13,533 to Citi Cards, $8,329 to Raleigh General Hospital, nearly $5,000 in six different claims to the Sheriff of Raleigh County, and a variety of other amounts less than $10,000.
She listed her monthly expenses, including mortgage payments, taxes, insurance, utilities, food, transportation, car payments, etc., as nearly $5,000.
A 13-year-old daughter and a 12-year-old son are listed as dependents living at her residence. Cochran's 38-year-old husband died Feb. 11.
She is being represented by attorney Robert Dunlap in the bankruptcy filing.
"Chapter 7 bankruptcy is the simplest and most common form of bankruptcy," Dunlap said. "In Chapter 7, if the debtor has assets not protected by an exemption, a court appointed trustee may sell the assets and distribute the net proceeds to creditors according to priorities established in the Code."
Dunlap said he could not discuss specific clients during the course of their representation.
• • •
The civil filing from last Tuesday said Cochran was ordered to forfeit real estate holdings at 433 4-H Lake Road in Daniels, 219 N. Eisenhower Drive and 210 Parkwood Drive, along with any improvements and any rental income the properties generate.
U.S. Attorney Michael Stuart said in the filing that the federal government will prove that forfeiture of Cochran's property was justified, as she and her late husband had purchased the properties or improved them using money they had acquired illegally.
Stuart alleged that Cochran and her late husband, who died Feb. 11, used their companies, Tactical Solutions Group and Technology Management Systems (TMS), as money-laundering operations for mail, wire and bank fraud. The two businesses are active government contractors.
"As a result of her fraud, Natalie Cochran obtained millions of dollars in fraud proceeds in her personal bank account as well as the Tactical Solutions and TMS business accounts," the filing states. "Using these illicit proceeds, Natalie Cochran engaged in numerous transactions in violation of the money laundering laws, including transactions that resulted in the purchase of the two real properties identified for forfeiture."
Stuart said Natalie and/or Michael "solicited investments from a number of individuals" for government contracts, including a number of contracts supposedly for the Department of Defense. Stuart said investors gave the Cochrans money to purchase or invest in government contracts, with Tactical Solutions and TMS acting as brokers for the contracts.
The problem, Stuart said, is there were never any government contracts. Instead, he alleged, the Cochrans used investors' funds to make partial returns on investment payments.
"The Cochrans also used the illicit investment proceeds to support their outwardly lavish lifestyle by making luxurious purchases, dining out frequently, taking vacations and making payments towards the defendants' properties," Stuart stated.
Stuart said an ongoing investigation has shown the Cochrans scammed at least $2.8 million from private individuals in the alleged scheme, using mail, wire and bank fraud.
A search on the federal court database shows no criminal filings against either of the Cochrans.
The bankruptcy case is Case No. 5:19-bk-50122.
— Email: email@example.com and follow on Twitter @WendyHoldren