— A local state House candidate's home was auctioned off late last month as part of her husband's bankruptcy case, which was triggered by a $2.3 million fraud verdict involving satellite television.

Kim Coley, a Wake County Republican running in House District 36, has moved to another address in the district and changed her voter registration, meaning she's still qualified to run under North Carolina's residency requirements. But a federal judge deemed her and her husband's testimony "not credible" last fall as part of Randy Coley's bankruptcy proceedings, and now there's litigation to block the couple from shielding their assets from the verdict.

Coley's campaign website is trustkimcoley.com.

The underlying case goes back to before 2013, when a federal court in Virginia held Randy Coley liable for more than $2.3 million "for conducting a fraudulent scheme involving the unauthorized transmission of television programming," according to the 4th U.S. Circuit Court of Appeals, which upheld that judgment in 2018.

The court found that Randy Coley collected payments for television services at more than 2,500 units at a resort, but paid DIRECTV for only 168.

Randy Coley declared bankruptcy in April 2018, and the trustee has been selling the couple's assets, including a home in Cary that was auctioned off in January for $570,000. That was the home Kim Coley listed when she filed to run for House District 36 in December. She faces Gilberto Pagan in the March 3 Republican primary. Libertarian Bruce Basson is running as well in this race, and the incumbent is Democratic state Rep. Julie von Haefen.

The Coleys' house on Lake Gaston was also slated for sale last month, according to the bankruptcy trustee's latest report. A beach house in North Topsail Beach was sold off earlier, as were several airplane hangers in Fuquay-Varina and a number of other properties.

Kim Coley has not returned phone messages over the last several days, and an attempt to reach her husband through his attorney was not successful Thursday. But when WRAL News asked last month about the DIRECTV verdict, Kim Coley said it was her husband's business deal and that she didn't know anything about it. She said they married in 1994 and remain so.

"I just married the man," she said in January.

That's what the couple said during initial court proceedings in the DIRECTV case – that she didn't have any ownership in his businesses, including East Coast Cablevision or "Its Thundertime LLC." As a result, she was dismissed from the suit.

But in a motion later in the case, Randy Coley said Kim Coley had a 50 percent interest in Its Thundertime and that she was part of it from the beginning. Kim Coley also filed paperwork in a North Carolina state court "seeking a declaration that she held a 50 percent interest in ITT," according to the 4th Circuit's decision in the DIRECTV case.

"The Coleys’ shifting positions reflected an attempt to assert whatever position would advance their quest to avoid liability and to place their personal assets beyond the reach of DIRECTV," the 4th Circuit said.

Kim Coley told WRAL that she simply didn't understand the ownership question and that she didn't have legal representation during her questioning. Asked which position was accurate – whether she owned 50 percent of the company or none of it – Coley said she wasn't sure whether she was allowed to say, and she referred WRAL to her attorney.

After he declined to talk, WRAL called Coley back. She said she'd call back but didn't and hasn't taken calls since.

Among the arguments the Coleys made in this case, according to the 4th Circuit decision, was "that DIRECTV should not have relied on Mrs. Coley’s representations, because DIRECTV had questioned her veracity."

The latest trustee report in the bankruptcy proceedings refers to the couple's former home in Cary and the lake house as "fraudulently conveyed property." A federal bankruptcy judge determined in October that the Coleys transferred properties away from Thundertime "in a bald effort to avoid paying the DIRECTV judgment."

Judge Joseph Callaway wrote that "the Coleys’ testimony simply is not credible," and he said the property sales could go forward to satisfy the debt.

"The transfers themselves and incredible testimony given at this trial demonstrate that the Coleys have not accepted and never will accept responsibility for their actions," he wrote.

The bankruptcy trustee has also sued Kim Coley directly in federal court over transfers from Its Thundertime, seeking an injunction against further transfers. That case is set for trial in May.