Three men were charged with fraud and other crimes in a scheme involving a company that was worth $100 million in the stock market despite having only a small-town New Jersey deli to its name.
, including by unearthing more details about the company’s then-CEO, Paul Morina, a legendary high school wrestling coach in southern New Jersey.with Morina. Prosecutors said Patten convinced the owners of the deli, which was established in 2014, to put it under the control of an umbrella company, called Hometown International.
In 2019, Hometown International started selling shares on what’s known as the OTC Marketplace, where shares of small companies are traded. “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,” prosecutors said. The men took similar actions to take control of another small company, E-Waste, prosecutors said.
As of last year, Patten was barred by FINRA, the broker-dealer regulator, from acting as a stockbroker or associating with broker-dealers. He was the subject of repeated disciplinary actions by FINRA. In 2006, he successfully appealed sanctions issued by an SEC judge in a case where he was accused of manipulating the price of a stock listed on the Nasdaq. Patten was defended in that matter by Ira Sorkin, who was best known for representing Ponzi scheme kingpin Bernie Madoff.
The Cokers and Patten face steep prison sentences and fines. The securities fraud and securities price manipulation counts carry maximum penalties of 20 years in prison and a $5 million fine. The wire fraud and money laundering counts also have maximum penalties of 20 years in prison. The conspiracy to commit securities fraud and conspiracy to manipulate securities prices counts each carry a maximum penalty of five years in prison.
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