Plaintiffs want $100 million in a deferred NJ deli SEC case

New Jersey federal prosecutors want the Securities and Exchange Commission to delay its civil case against the alleged masterminds behind A $100 million scam scheme involving a small-town deli So it will not stand in the way of their ongoing criminal case.

New Jersey district attorneys filed a motion Wednesday saying the SEC case overlaps “significantly” with their ongoing criminal case and that the civil case should be delayed until litigation is completed, including a potential trial, according to court records.

Federal prosecutors argued in the lawsuit that a postponement of the civil case would “preserve the integrity” of the ongoing prosecution by preventing the defendants from seeing the extent of government evidence against them.

During the discovery phase of civil and criminal cases, defendants have the ability to see evidence that will be used against them at trial, but they have access to more material in civil matters because the boundaries are wider.

The SEC and the suspects’ attorneys approved the request, which is common in such cases. Judge Christine O’Hearn has yet to rule on this matter.

A conference call in the criminal case is scheduled for December 14, but it is expected to be mostly procedural and an opportunity for prosecutors and defense attorneys to brief the judge on the status of the litigation.

In September, James Patten and father-son duo Peter Cocker Sr. and Peter Cocker Jr. were arrested. on charges of securities fraud Allegedly masterminding a scheme that inflated the prices of two publicly listed companies, Hometown International and E-Waste Corp, a shell company.

conspiratora bioplastics startup, has merged with Hometown International, earlier this year.

Although Hometown International’s only asset was Your Hometown Deli, a now-closed small sandwich shop in Paulsboro, New Jersey, that had annual income of less than $40,000, the trio used manipulative trading to inflate its market capitalization to more than $100 million, they say. prosecutors alleged. .

The scheme began when Patten convinced Your Hometown Deli’s owner, respected local high school wrestling coach and manager Paul Morena, to put the restaurant under the control of Hometown International, an umbrella company they set up, prosecutors alleged.

“Unbeknownst to the deli owners, almost immediately after the formation of Hometown International, Patten and his associates began positioning Hometown International as a vehicle for a reverse merger that would be very profitable for them,” prosecutors said in a press release previously.

“Shortly thereafter, Patten, Coker Sr., and Coker Jr. executed a calculated scheme to take over the management and stock of Hometown International from the deli owners.”

The guys devised a similar scheme for controlling e-waste. Prosecutors said the tactics “artificially inflated” the values ​​of Hometown International and E-Waste by 939% and 19,900%, respectively.

Cocker Sr. and Patten Not guilty.

Patten’s attorney, Ira Sorkin, the high-profile attorney who once represented notorious Ponzi scheme fraudster Bernie Madoff, did not comment when asked if the case was expected to go to trial.

Coker Sr.’s attorney, Mark Agnifello, who previously defended “Pharma Brothers” Martin Shkreli and disgraced film producer Harvey Weinstein, could not be reached. It is not clear whether or not Hong Kong-based Cocker Jr. has a lawyer is still on the run. Morena did not respond to a request for comment.

Patten, Coker Sr. and Coker Jr. were charged just over a year after shares of questionable Hometown International were exposed. It was revealed by hedge fund manager David Einhorn In a letter to clients it warns of the risks retail investors face.

“Someone referred to Hometown International (HWIN), which owns one restaurant in rural New Jersey… HWIN reached a market cap of $113 million on February 8. The largest shareholder is also CEO/CFO/Treasurer and Director,” Einhorn said. In his April 2021 letter: “The pastrami must be great.”

After the news of the indictment spread, sneered on Twitter: “I think the pastrami wasn’t great.”