By Jessica Farrish
CNHI News W.Va.
BECKLEY — Natalie Cochran, facing up to 11 years in prison for wire fraud and money laundering, will be sentenced Jan. 29 in United States District Court for the Southern District of West Virginia in Beckley, U.S. District Court Judge Frank Volk has ruled.
According to court documents, Cochran has been working at an undisclosed location as an emergency pharmacist to administer Covid vaccinations. Cochran has a doctorate of pharmacy degree from West Virginia University. From 2013 to 2017, she worked for Access Health.
Cochran pleaded guilty in September to one count each of wire fraud and money laundering. She had been arrested in September 2019 on 26 counts that included fraud, money laundering and bankruptcy fraud, all related to a Ponzi scheme that she admitted she and her husband cooked up that swindled $2.6 million from investors and financial institutions.
She and her late husband, Michael Cochran, owned Tactical Solutions Group (Tactical) and Technology Management Systems (TSM). Federal prosecutors allege that the couple talked family, friends and local residents into investing in Tactical, which they said had contracts to provide weapons to the U.S. Department of Defense. There were no contracts, according to federal prosecutors, and the couple spent the money on luxurious living.
As part of the plea deal, she faces up to 11 years in prison. She agreed with prosecutors to serve between 37 and 135 months, to forfeit cash and assets and to pay restitution of about $2.6 million.
U.S. Attorney Mike Stuart has asked Volk to issue a 135-month sentence. Stuart alleged in court documents that Cochran had actually intended to steal $4.85 million.
"The economic devastation the defendant wrought upon multiple members of the Beckley community is similarly beyond words," said Stuart.
According to Stuart, a local doctor lost $700,000 that he had planned to place in a trust for his disabled daughter. One dad lost $80,000 of his son's college tuition. A couple lost their entire life savings of $250,000.
Stuart said Cochran had convinced her own sister to invest her retirement savings into the scheme. Another of Cochran's relatives lost $300,000, he said.
Hauling Reorganization LLC, a small local business, lost about half a million dollars to the scam, said Stuart.
According to Stuart, Cochran sent investors fake contract numbers and documents, including invoices, Internal Revenue Service 1099 forms and other tax forms. When questioned, he said, she lied. She fabricated government audits of the company.
Stuart added that she had given investors "an overwhelming number of falsehoods" to explain the delay on their returns. She invented bank audits, problems with banks withholding the funds and other excuses.
Stuart said Cochran told her investors in 2018 to watch the Hollywood movie "War Dogs" as a "training exercise" in order to explain the delays. Based on real life events, the movie is about a pair of friends who exploit a government initiative that allows businesses to bid on U.S. military contracts during the Iraqi war.
Meanwhile, said Stuart, Cochran was using investors' money to make large-scale luxury purchases.
In October 2018, she fabricated an email from a fictitious Federal Reserve employee to explain why investors' funds were not available. Around the same time, she withdrew $31,729.60 from TSG and spent $14,572 at Kay Jewelers.
"A 135-month sentence is warranted because of the number of victims, the length of her two-year-long fraud scheme and overall egregious nature of the defendant's conducts," said Stuart. "Defendant's fraud scheme was not the result of a single mistake."
In a 13-page sentencing memorandum, Cochran's attorney, Rhett Johnson, asked that Cochran receive between 70 and 87 months in prison. Her attorney argued that because of her lack of criminal history, her profession as a pharmacist and her helping the community by working in the medical field, the requested sentence is fair. The sentence will also allow her to provide care of her children.
Michael Cochran died suddenly in February 2018.
"Being removed from her children's lives while they are still under her care is a far greater punishment for Ms. Cochran than incarceration itself," Cochran's attorney said.
Cochran has been on home confinement. For a time, her elderly dad and mom had moved into her home to ensure that she could be on home confinement.
Cochran has asked to pay back $250 a month in restitution once she is released. The probation officer has asked the court to make her pay back $1,000 per month, which her attorney said is not realistic. He added that, when determining Cochran's monthly cash flow, the court had counted her children's Social Security payments, which are intended to provide sustenance for her two children. Additionally, one of her children will be an adult when Cochran is released.
The government set Cochran's net worth at $383,403.79, which Johnson called "mathematical fiction." He said the government did not calculate the amount she is paying on her mortgage. He also rejected prosecutors' statements that Cochran can make more money working with the Bureau of Prisons as an inmate since she has a degree in pharmacy.
Johnson also wrote that the government had used Cochran's earnings as an emergency pharmacist administering Covid vaccines to set her restitution payments, a funding stream that will not likely be available when she completes her prison term, he said.
Cochran's attorney said she had joined "her husband's business with honest intentions" but had "gotten in over her head" and made a series of poor decisions, quitting the position at Access Health in 2017 to work "for her husband's business."
Cochran's psychiatrist, Dr. Terry Lusher, wrote a letter to the court in November to request Cochran be ordered to serve her sentence on home confinement.
Lusher said that he had primarily diagnosed Cochran with post-traumatic stress disorder.
"In my opinion, this diagnosis is related to her history of domestic violence," Lusher wrote.
He said that she also suffers severe physical impairments "related to her history of cardiac issues."
Lusher said that allowing Cochran to serve the sentence at home will offer benefits to her two children, who are still grieving the loss of their father and processing their mother's legal problems.
"In my opinion, removing Ms. Cochran from the home would have a severe detrimental impact on her physical health and her psychological issues," wrote Lusher. "Moreover, the psychological impact on the Cochran children could possibly be devastating."
When setting the sentencing date, Volk noted that six to eight victims plan to address the court on Jan. 29.
Due to social distancing guidelines, the victims will receive priority in seating, the judge wrote.