Following the February death of her husband, Natalie Cochran allegedly accepted a $50,000 down payment from a local orthodontist for sale of her Tactical Solutions Group, providing him with false financial information about the flailing business.
During a creditors' meeting Thursday in the U.S. Southern District Bankruptcy Court, Cochran appeared with her bankruptcy attorney, Robert Dunlap, to answer questions from several creditors' attorneys about her July bankruptcy filing, including an attorney from the bankruptcy division of the U.S. Department of Justice.
Cochran, a Daniels pharmacist, is under federal and state investigation for allegedly operating a $2.8 million Ponzi scheme with her late husband, Michael, through Tactical and Technological Management Services (TSM).
She is also being investigated in the death of her husband who died in hospice care five days after taking a fall in the couple's home.
Cochran stated in court that Dan Foley, who lives in Glade Springs and has dental offices in Beckley, Mt. Nebo, Lewisburg and Oceana, had expressed interest through a third party in purchasing Tactical from her. She did not say that she had accepted money.
But Foley told The Register-Herald on Thursday that Cochran had accepted a $50,000 down payment from him after her husband's death for the purchase of Tactical and that she had provided him with false tax information about the business.
Foley did not follow through on the purchase of the company.
Also during the bankruptcy hearing, Cochran admitted to selling a leased Mercedes to Jeremy Setzer of Beckley but was unable to provide a title, according to attorneys. The 2016 Mercedes-Benz GLE 350 D 4Matic was listed on her bankruptcy filings, valued at $37,500, along with a 2014 GMC 3500 HD Denali, valued at $32,000. Cochran admitted selling the Denali to another party. But when her accounts were frozen, she said in the hearing, the payment that would have paid off the 36-month lease on the Mercedes would not clear the bank.
She also admitted to pawning firearms and jewelry for an undisclosed amount of money. She invoked the Fifth Amendment, to avoid self incrimination, when asked if those funds were for personal or business use.
A Raleigh County official stated that the state has opened a criminal investigation into the death of her husband and that she is a suspect. Raleigh County Prosecuting Attorney Kristen Keller has refused to confirm or deny the report.
Cochran was the majority owner of Tactical Solutions Group, which was a woman-owned business, she stated Thursday. In court, she refused to say if Tactical had ever made a profit.
Cochran filed for Chapter 7 bankruptcy in July, listing assets of $397,000 with liabilities of $1.4 million.
Cochran told attorneys on Thursday that West Virginia State Police officials were investigating the businesses in 2018. Law enforcement officials had frozen most of her accounts but not all of them, making it difficult to pay creditors.
She said that federal investigators later froze all of her accounts, seized email accounts and made it impossible for her to access funds to pay creditors, prompting her to file Chapter 7 bankruptcy.
She said that she would pay her bills and creditors if her accounts were available to her.
In a civil court case filing in July, U.S. Southern District Attorney Mike Stuart alleges that the Cochrans had accepted large payments from investors after presenting Tactical as a provider of semi-automatic rifles to the US Department of Defense. They did not sell semi-automatic weapons to the government, according to Stuart.
One unidentified investor invested more than $407,000 with TMS in June 2017 for government. To date, the investor has seen less than $60,000 in returns on the investment.
Another investor invested around $467,000 in January 2018 for government contracts. The investor saw a return of about $340,533, Stuart reported.
One investor sank $612,907 into Tactical Solutions, starting in September 2018. Federal investigators said that individual has seen no return on investment.
On Thursday, she said she received a salary for the two businesses and included that on the bankruptcy. She would not describe her duties to warrant the salary.
She also declined to say how much money had been paid out to investors. She would not say when Tactical had been formed. She would not say if Tactical had ever made a profit.
She has been appointed a public defender. Dunlap said he is not clear on whether a public defender has been appointed to defend her with the companies, however.
Cochran said she was unsure if a $454,350 judgment from Nassau County, N.Y., that she had signed and listed on the bankruptcy, was against her personally or against "the company."
Cochran responded to many of the questions on Thursday by invoking her Fifth Amendment right to not incriminate herself by providing information, or by saying that the information pertained to her businesses and that Dunlap had advised her not to answer questions about the businesses, or by stating that she did not know the answer.
Questions by creditors' attorneys and a US Department of Justice Bankruptcy Division attorney focused on determining whether Cochran had listed all assets on her Chapter 7 bankruptcy and that she did not have hidden assets.
Cochran offered information in response to a series of questions by several attorneys, including the following:
* She did not list Michael's mother and stepfather, Ed and Donna Bolt, as personal creditors. An attorney suggested the Bolts were owed "in the $400,000 range."
* Regarding Michael's death, Cochran testified that she is the beneficiary of his estate and that local attorney Chris Davis is the trustee of the children and would be the beneficiary if she were to pass away.
"I haven't received any life insurance money," she said.
She said the life insurance policy, for an undisclosed amount, did not pay her for his death. Since the death happened in the couple's home, she said, the life insurance agent said the homeowner's insurance should pay it.
Cochran said that homeowner's insurance agent would not pay out a $300,000 policy because death of a homeowner was not covered in the policy. She also had an accidental death policy for $25,000.
* She was unsure if Mike had any bank accounts solely in his name, she said. She had stated in bankruptcy documents that he did not have accounts in his name, she said, at the advice of a probate office employee. Cochran said he had no corporate stock in his name.
* She said that she and her husband owned two lots at The Resort at Glade Springs. They bought them in December 2017 by paying only claims fees. The owners wanted to "unload" them. There were no liens on the lots, she said.
* Cochran said she and her husband had purchased two hangars at Raleigh Memorial Airport in January. Both hangars were later signed over to Glen's Towing owners Tom Miller and Chuck Gray and to Davis.
She said the purchasers paid the balance of $115,000 when they bought them, plus $500. The company had remodeled the hangars, she said.
* Following her husband's death, she gave a 2013 Polaris Ranger that Mike had owned to Davis. She said the Ranger had been a gift from her to Michael and that Cochran's father arranged the purchase from a man at his church.
* She had gifted to Steve Maynard a Big Dog motorcycle bought in 2008 in Michael's name.
* She said she did not know if Michael had gotten money from businesses as co-owner. She did not know if the tax returns would show the money that he had received.
* She invoked the Fifth Amendment when asked about several purchases and whether they were personal or business use, including a purchase from Victoria's Secret.
* She said that a payment to EyeCare One was covered by the business as health care for a company owner.
* A student loan payment in 2018 may have been paid with a Tactical credit card, she said.
* She addressed several wire transfers under questioning by Premier Bank counsel Tom White. Cochran told White that in April 2019, she had paid $10,000 to her sister, Penny Jessup, for providing contracted educational services to Tactical; $10,000 to Mario Lowery for a purpose "related to business" and $10,000 to Miller Construction for business and $10,000 to Michael's stepfather, Ed Bolt, which she said was "related to the business."
* Under questioning by federal bankruptcy attorney Gary Tinder, Cochran grew emotional. Tinder reminded her that she had signed agreements in the bankruptcy filing that she would not hide assets.
Tinder's questions aimed to establish whether Cochran had ownership in a business not listed on the bankruptcy. Dunlap said she may have had ownership of an LLC business and that it had been inadvertently left off of the filing but that she had disclosed it to him and an amendment would be made.
Tinder pointed out that some items had not been listed in the bankruptcy. He said two amendments to the original filing had already been made and that he would note that any additional amendment was made in response to questioning at the Thursday meeting.
When Tinder asked about the six scholarships awarded in May to students at Shady Spring High School, Cochran said the scholarships were through the business and not through her. When asked if they would be traced back to an account, she declined to answer.
Three of the scholarships were given to Cochran's relatives.
"I have nothing," Cochran said, crying. "They took $13 from my son's desk. I had to stay up with him all night, crying, because they took his dirt bike.
"I did not intentionally mislead."
Tinder asked her why items were not listed as gifts in the paperwork. She said that she did not list the motorcycle given to Maynard or a dirt bike given to Mike Bowen as gifts because they had been in her husband's name.
She said she had made an insurance claim of theft of $300 in tools, mostly belonging to the business, to State Police, but the police refused to investigate and she did not get reimbursement from the insurance.
Cochran said her father had made payments to creditors for her businesses but not for her, personally. She did not include it on the filing because it was not related to her personal bankruptcy.
She did not include business tax returns from two years prior to the business because she had not been aware she had to do so, she said and then pleaded the Fifth Amendment. She added that she could not say which entities she had given business-related returns.
Cochran offered to amend paperwork and said she had not tried to hide assets.
"Paperwork is very daunting on something like that," she said. "I wasn't trying to hide anything."
Attorneys reserved the right to ask follow-up questions at a continued meeting, to be scheduled in the future.