Hometown Deli, Paulsboro, N.J.
Mike Calia | CNBC
Federal prosecutors in New Jersey need the Securities and Exchange Commission to postpone its civil case towards the alleged masterminds behind a $100 million fraud scheme involving a small-town deli so it will not get in the way in which of their ongoing legal case.
Prosecutors for the District of New Jersey filed a movement on Wednesday saying the SEC’s case “substantially” overlaps with their ongoing legal case and the civil matter ought to be postponed till the litigation, together with a possible trial, is accomplished, court docket information present.
Postponing the civil case would “preserve the integrity” of the continuing prosecution by stopping the defendants from seeing the extent of the federal government’s proof towards them, federal prosecutors argued within the submitting.
During the invention section of civil and legal issues, defendants have the power to see the proof that is going for use towards them in trial however they’ve entry to way more supplies in civil issues as a result of the confines are broader.
The SEC and the attorneys for the suspects consented to the request, which is frequent in such instances. Judge Christine O’Hearn has but to rule on the matter.
A phone convention is scheduled within the legal case for Dec. 14, but it surely’s anticipated to be largely procedural and a chance for the prosecutors and protection attorneys to replace the decide on the standing of the litigation.
In September, James Patten and father-and-son duo Peter Coker Sr. and Peter Coker Jr. have been arrested and charged with securities fraud for allegedly orchestrating a scheme that inflated the costs of two publicly traded corporations, Hometown International and E-Waste Corp, a shell firm.
Courtroom sketch of James Patten, left, and lawyer Ira Sorkin at N.J. District Court in Camden, N.J., Oct. 11, 2022
Source: Elizabeth Williams
Makamer, a bioplastics startup, merged with Hometown International, earlier this 12 months.
Even although Hometown International’s solely asset was Your Hometown Deli, a now-closed tiny sandwich store in Paulsboro, New Jersey, that had below $40,000 in annual income, the trio used manipulative buying and selling to inflate its market capitalization to greater than $100 million, prosecutors alleged.
The scheme started when Patten satisfied the proprietor of Your Hometown Deli, esteemed native highschool wrestling coach and principal Paul Morina, to place the restaurant below the management of Hometown International, an umbrella firm they created, prosecutors alleged
“Unbeknownst to the deli owners, almost immediately after Hometown International was formed, Patten and his associates began positioning Hometown International as a vehicle for a reverse merger that would yield substantial profit to them,” prosecutors mentioned beforehand in a news launch.
“Shortly thereafter, Patten, Coker Sr., and Coker Jr. undertook a calculated scheme to gain control of Hometown International’s management and its shares from the deli owners.”
Peter Coker Sr. and his spouse, Susan Coker, at N.J. District Court in Camden, N.J., Oct. 11, 2022
Source: Jerry Frasier and Vinny Castaldo
The males concocted the same scheme to take management of E-Waste. The techniques “artificially inflated” the values of Hometown International and E-Waste inventory by 939% and 19,900%, respectively, prosecutors mentioned.
Coker Sr. and Patten have pleaded not responsible.
Patten’s lawyer Ira Sorkin, the high-profile litigator who as soon as repped the infamous Ponzi scheme fraudster Bernie Madoff, did not remark when requested whether or not the case is anticipated to go to trial.
Coker Sr.’s lawyer Marc Agnifilo, who beforehand defended “pharma bro” Martin Shkreli and disgraced film producer Harvey Weinstein, could not be reached. It’s not clear whether or not the Hong Kong-based Coker Jr. has an lawyer, and he stays a fugitive. Morina did not reply to a request for remark.
Patten, Coker Sr. and Coker Jr. have been charged just a little over a 12 months after Hometown International’s doubtful inventory was revealed by hedge fund supervisor David Einhorn in a letter to purchasers warning of the hazards retail traders face.
“Someone pointed us to Hometown International (HWIN), which owns a single deli in rural New Jersey … HWIN reached a market cap of $113 million on February 8. The largest shareholder is also the CEO/CFO/Treasurer and a Director, who also happens to be the wrestling coach of the high school next door to the deli,” Einhorn mentioned within the April 2021 letter. “The pastrami must be amazing.”
After news of the indictment broke, he quipped on Twitter: “I guess the Pastrami wasn’t so great.”
