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$100 Million NJ Deli Scheme Ends in Federal Fraud Charges

$100 Million NJ Deli Scheme Ends in Federal Fraud Charges

Three Men Charged in Securities Trading Schemes

In 2021, a hedge fund manager, David Einhorn, brought Hometown Deli in Paulsboro, New Jersey into the spotlight by questioning how a single deli had $100 million stock with just over $38,900 in sales. While Einhorn was writing a blog meant to advise investors about the dangers of excess and levy for more regulatory oversight, he pointed investigators to a supposed 7-year-long white-collar scheme.

Allegedly, the men schemed to increase the stock price of the deli using different methods to conceal their fraudulent trades, and Peter Coker Sr., Peter Coker Jr., and James Patten were charged with multiple counts of conspiracy and securities fraud; Patten also faces additional wire fraud and money laundering charges. The Securities and Exchange Commission is also taking civil action against the three men and has filed civil fraud charges.

Prosecutors also claim that the trio conspired (beginning in 2014) to increase the prices of two publicly-traded companies (E-Waste Corp and Hometown International) to generate illegal funds by purchasing private companies in a reverse merger. Because of their supposed action, Hometown’s stock prices increased by 939% and E-Waste Corp’s stocks increased by 19,900%. As of April 2021, Hometown International’s market value reached $123 million even though its sole asset is Hometown Deli, which only made $38,980 in sales in 2020 and 2021.

Reportedly, Paten helped his childhood friend and their co-worker purchase the deli in 2015, but the stocks for Hometown began selling in 2014. Neither owner has been charged or connected with the supposed scheme as of yet. In June, the deli closed after its merger with Makamer Holdings Inc and sold for $15,000.

While Patten and Coker Sr. have been placed under arrest, Coker Jr. is currently at large and is believed to be a resident of Hong Kong. Each of the three men face up to 20 years of imprisonment and up to $5 million in fines for the conspiracy and securities fraud charges. Patten also faces up to 20 years of imprisonment and a fine of $250,000 or twice the gross gain or loss from the offense for each of the wire fraud and money laundering charges.

Let Us Help You Protect Your Rights & Freedom

If you or a loved one are under investigation for or have been charged with a white-collar crime or federal charges, Brickfield & Donahue can help you understand your legal rights and options as well as develop a personalized defense strategy. Common defense strategies include:

  • Lack of intent. Intent to defraud or commit the crime is a key element of many offenses and if the prosecution cannot prove that the defendant had intent, the case can be thrown out.
  • Lack of knowledge. A defendant can try to prove that they were a part of the offense but did not know they were committing a crime.
  • Weaknesses in the prosecution’s case. Defendants can work with their attorneys to try to prove that the prosecution’s case is not ironclad and does not prove beyond a reasonable doubt that the defendant committed the crime.
  • Coercion. If the defendant was forced to commit the offenses, that is a valid defense.
  • Entrapment. If an undercover officer coerced the defendant to commit the crime, this is a valid defense. However, this defense is only valid in cases where it can be proven the defendant would not have committed the crime without the officer’s influence.

Call 201-574-7919 or reach out online today so we can get started on your defense.

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