Federal authorities said Monday that three men have been charged with fraud and other crimes in a scheme involving a $100 million company in the stock market despite having only a small New Jersey Daily in its name.
The three men—James Patten, 63, of Winston-Salem, North Carolina; Peter Cocker Sr., 80, of Chapel Hill, North Carolina; and Peter Coker Jr., 53, of Hong Kong – charged with 12 counts, including conspiracy to commit securities fraud, securities fraud and conspiracy to manipulate securities prices. Patten and Cocker Sr. were arrested on Monday. Coker Jr is still at large.
Federal prosecutors said Patten is also charged with four counts of securities fraud, four counts of wire fraud, and one money laundering count. The men were also accused of market manipulation by the United States Securities and Exchange Commission.
Your city of Dili, the work at the center of the probe, is located in Bullsboro, New Jersey, above the Delaware River from Philadelphia. The delicious, praised for its cheese slices and Italian subs, generated annual revenue of less than $40,000 and closed earlier this year. The parent company, Hometown International, has Merged with a bioplastic company. E-waste too Merged with another company last year.
The controversy surrounding Your Hometown Deli and the people involved in it has raised questions about whether the parent company is operating within the law. The accusations are also linked to the men’s involvement in A fictitious associate company called E-Waste.
The $100 million New Jersey Deli, as Your Hometown Deli has become, was first brought to public attention by investor David Einhorn. In a letter to clients. CNBC I also mentioned about the companyincluding revealing more details about the company’s then CEO, Paul Morena, a legendary wrestling coach at a high school in southern New Jersey.
Patten, one of the men accused in the scheme, wrestling in high school with Morena. Prosecutors said Patten convinced the owners of the deli, which was founded in 2014, to put it under the control of an umbrella company called Hometown International.
“Unbeknownst to the deli’s owners, immediately upon the formation of Hometown International, Patten and associates began positioning Hometown International as a vehicle for a reverse merger that would yield significant profits to them,” prosecutors said in a statement.
In 2019, Hometown International began selling shares in what is known as the OTC Marketplace, where shares of small companies are traded.
“Shortly afterwards, Patten, Cocker Sr. and Cocker Jr. plotted a calculated plan to take control of the management of Hometown International and its stock of ready-to-eat owners,” prosecutors said. Prosecutors said the men took similar actions to take control of another small business, E-Waste. That company’s shares went up, too, despite not having any real business in it, According to CNBC.
Prosecutors said the tactics “artificially inflated” the values of Hometown International and E-Waste by 939% and 19,900%, respectively.
As of last year, Patten was banned by FINRA, the broker’s regulator and dealer, from acting as a broker on the exchange or dealing with brokers and dealers. He was the subject of frequent disciplinary action by FINRA. In 2006, he successfully appealed the sanctions handed down by a SEC judge in a case in which he was accused of manipulating the price of a Nasdaq-listed stock. Ira Sorkin defended Patten on the matter, who is best known for his representation of Ponzi scheme chief Bernie Madoff.
The Cokers and Patten face prison sentences and heavy fines. Charges of securities fraud and securities price manipulation carry maximum penalties of 20 years in prison and a $5 million fine. Charges of electronic fraud and money laundering carry maximum penalties of 20 years in prison. Conspiracy to commit securities fraud and conspiracy to manipulate the price of securities each punishable by imprisonment for a maximum of five years.
Read the full indictment over here.
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