Your Hometown Deli in Paulsboro, N.J.
CAMDEN, N.J. – Two men charged in an alleged stock-manipulation scheme involving a small-town Latest Jersey deli pleaded not guilty Tuesday morning.
Peter Coker Sr., 80, and James Patten, 63, who were arrested by federal authorities last month in North Carolina, made their pleas at a federal courthouse that is a few 20-minute drive from the now-closed shop at the center of the case.
Patten told CNBC before the hearing Tuesday that he hired attorney Ira Sorkin, who is thought for representing the late Ponzi schemer Bernie Madoff. Sorkin previously represented Patten in a dispute with the Securities and Exchange Commission, which was dismissed in 2006.
Coker Sr. is represented by Marc Agnifilo, who has previously defended fraudster and “pharma bro” Martin Shkreli, disgraced movie producer Harvey Weinstein, NXIVM cult leader Keith Raniere, and a Russian bank sanctioned over the invasion of Ukraine.
Patten was in good spirits at court Tuesday, making jokes about CNBC’s coverage of the case and saying he felt pretty good. Coker Sr. was joined by his wife, Susan, and kept quiet, his hands folded or resting on his chin. The judge said that a pre-hearing test Tuesday morning revealed each men had alcohol of their system. Coker said he and his wife had drinks at dinner the night before, while Patten denied he had any alcohol previously 48 hours.
The judge said Patten also tested positive for buprenorphine, an FDA-approved prescription drug used to treat pain and opioid addiction. Patten denied he had taken it.
Patten and Coker are accused of several federal crimes, including fraud, for allegedly pumping up the worth of a publicly traded company that achieved a market capitalization of greater than $100 million last 12 months despite having only Your Hometown Deli in Paulsboro, Latest Jersey, to its name. The deli made lower than $40,000 in sales a 12 months.
Federal prosecutors have described the case as a tale of international fraud and betrayal. Peter Coker Jr., 53, the son of Coker Sr., is predicated in Hong Kong and is taken into account at large. Federal authorities sought to detain Coker Sr. before agreeing to a conditional release. He surrendered his passport to authorities in North Carolina on Friday. Each he and Patten should not permitted to go away the continental United States.
The SEC also sued the lads in a civil case over the alleged plot.
The boys were charged for his or her involvement in Hometown International and an analogous shell company called E-Waste. Prosecutors alleged that the lads sought to counterpoint themselves by inflating the costs of Hometown International and E-Waste. At one point, their values on so-called over-the-counter markets had surged by 939% and 19,900%, respectively.
The boys are charged with conspiracy to commit securities fraud, securities fraud and conspiracy to control securities prices. The fraud and manipulation charges carry a maximum sentence of 20 years and a maximum superb of $5 million.
Patten is moreover charged with manipulation of securities, wire fraud and money laundering.
Based on the indictment, the lads duped the founders of Your Hometown Deli — Paul Morina, a former highschool wrestling teammate of Patten’s, and Morina’s co-worker Christine Lindenmuth — telling them that the umbrella corporation could help with the restaurant’s expansion. Neither Morina, principal and wrestling coach at Paulsboro High School, nor Lindenmuth, a math teacher at the identical school, were mentioned by name in court documents.
The boys then coordinated to manage and transfer Hometown International stock between themselves and their friends for the aim of inflating the share price, prosecutors said.
Patten didn’t comment when asked Tuesday morning whether he had since spoken to Morina.
Peter Lee Coker mugshot from the Raleigh/Wake City-County Bureau of Identification (CCBI).
Source: Raleigh/Wake City-County Bureau of Identification
Prosecutors said Patten and the Cokers personally enriched themselves through consulting contracts that paid $15,000 a month to Coker Sr.’s company, North Carolina-based Tryon Capital, and $25,000 a month to Coker Jr.’s company, Macao-based VCH Limited. James Patten was a partner at Tryon Capital.
The boys had similar, albeit smaller, consulting contracts with E-Waste.
Ultimately, the lads planned to make use of each Hometown International and E-Waste as vessels for reverse mergers, which might allow other firms to go public through the 2 vehicles, authorities said.
When Makamer Holdings, a bioplastics company, initiated a reverse merger with Hometown International, the deli was sold for $15,000. The deli is now permanently closed.
Coker Sr. and Patten have had brushes with regulators and the law before.
Coker Sr. was sued in 1992 for allegedly hiding money from creditors and alleged business-related fraud. He has denied wrongdoing in those cases, certainly one of which was settled out of court in recent times in North Carolina. The identical 12 months, Coker Sr. was also accused of indecent exposure to minors.
In 2006, Patten was barred from FINRA, the broker-dealer regulator, for not complying with an arbitration award of greater than $753,000 for violating securities laws, unauthorized trading and churning a client’s account.
The peculiarities surrounding Your Hometown Deli first caught the attention of hedge-fund manager David Einhorn in 2021.
“The pastrami have to be amazing,” Einhorn quipped on the time. After the indictments last month, he tweeted: “I assume the pastrami wasn’t so great.”