Amidst Questions Over Husband’s Death And Misuse Of Little League Funds, West Virginia Pharmacist Arrested For $2.5 Million Ponzi Scheme
In a story seemingly pulled from a Hollywood screen, a West Virginia woman has been arrested on allegations that a company she operated with her late husband ran a Ponzi scheme that raised at least $2.5 million from investors who thought they were funding lucrative government contracts. Natalie Cochran, pictured above in a “Tailgate Socialite” shirt after being arrested yesterday morning, was indicted on twelve counts of wire fraud, one count of bank fraud, one four counts of aggravated identity theft, seven counts of money laundering, one count of bankruptcy fraud, and one count for false oath in a bankruptcy proceeding. If convicted on all counts, Cochran could face a maximum sentence of decades in federal prison. The charges come amidst a separate investigation into Cochran’s alleged misuse of funds from a Little League baseball program when she served as treasurer as well as a court order ordering the exhumation of her late husband’s body over questions about his death.
According to the indictment, Cochran and her late husband Michael Cochran owned and operated Technology Management Solutions LLC (“TMS”) and Tactical Solutions Group LLC (“TSG”), both of which were registered as federal government contractors. TMS allegedly operated as an information technology company that provided consulting services while TSG held itself out as a wholesale merchant and provider of durable goods.
Beginning in mid 2017, TMS and TPG were touted as successful government contractors, including that TPS was a “leading supplier to the U.S. Department of Defense, national security agencies, federal civilian agencies, prime contractors, and worldwide non-profit organizations.” Investors were told that they could invest in individual contracts that had been awarded to TMS or TSG and receive a percentage of the ensuing profits from the government work. Investors were provided with various information confirming the status of their investment, including contract numbers representing the purported government contract they were funding and forwarded emails from federal government employees or bank personnel about the contracts. In total, TMS and TSG raised at least $2.5 million from 11 investors.
Several months later, federal authorities filed a civil forfeiture complaint seeking to confiscate several properties owned by Cochran that had allegedly been purchased with illegal funds. The filing alleged that TSG and TMS never had any government contracts and were instead used as a Ponzi scheme to pay fictitious returns to new investors using existing investor funds. Investor funds were also purportedly used by the Cochrans “to support their outwardly lavish lifestyle by making luxurious purchases, dining out frequently, taking vacations and making payments towards the defendants' properties. Cochran filed personal bankruptcy the next day, listing less than $600 in bank accounts and cash on hand and $1.4 million in liabilities that did not include any investors in TSG or TMS.
The Indictment echoes allegations that TSG and TMS failed to ever secure a single government contract, instead claiming the companies used new investor funds to pay purported returns to existing investors and also secured cash advances from several financial institutions by claiming that investor deposits were actually business sales. Cochran is also accused of stealing the identities of various government employees through the forwarding of emails and other communications purporting to come from those officials lending credence and legitimacy to the alleged scheme. The Indictment also accuses Cochran of committing bankruptcy fraud by misrepresenting her income, failing to disclose transfers and gifts she had made, omitting her ownership of property and interests in TSG and TMS, and testifying as to those facts during her meeting of creditors.
Cochran is also under a separate investigation by West Virginia state police for her alleged misuse of funds while serving as treasurer of the Shady Spring Youth Baseball League, a private boy’s baseball league. Authorities are looking into a variety of suspicious transactions in the league’s bank account including:
a $1,364 charge to Amazon;
investments in crowdfunder.com, an online investment site;
$1,142 in charges at Dunham’s and Dick’s Sporting Goods;
a $402.60 charge to Parker Compound Bows for a bow and arrow;
$2,099 in Yeti cooler purchases;
$53 spent at Olive Garden;
$528 for baseball season tickets at West Virginia University;
Additionally, TSG had hosted a fundraiser for the league earlier this year at the Cochran’s residence that included a bingo game and the raffling of semi-automatic weapons and apparently raised more than $16,000 for the league’s coffers. However, TSG’s check for the donation subsequently bounced.
Authorities are also looking into the circumstances surrounding Michael Cochran’s death this February, with one outlet reporting that Cochran’s attorney claimed that Michael Cochran had been vomiting in a sink and broke a countertop when he collapsed. Natalie Cochran maintains that she called authorities and that her husband was transported to a hospital within 20 minutes of his fall; however, it is being reported that multiple witnesses have suggested that a longer amount of time may have elapsed between Michael Cochran’s fall and when he was taken to a hospital. Michael Cochran’s body was exhumed earlier this month pursuant to a sealed court order.
At an initial hearing following Natalie Cochran’s arrest, prosecutors urged the court to hold her indefinitely on fears she was a flight risk. Cochran was ordered to be placed on home confinement, but she is expected to remain in the state jail over the weekend while the logistics of the home confinement are resolved.
A copy of the Indictment is below: