Defendants plead not guilty in the $100 million Daily New Jersey case

CAMDEN, NJ – Two men accused in an alleged stock-manipulation scheme involving a small New Jersey town pleaded not guilty Tuesday morning.

Peter Cocker Sr., 80, and James Patten, 63, who were arrested last month by federal authorities in North Carolina, filed their pleas in federal court located about a 20-minute drive from the now-closed store in the heart of the city. a house.

Patten told CNBC ahead of Tuesday’s hearing that he had hired attorney Ira Sorkin, known to represent the late Ponzi scheme, Bernie Madoff. Sorkin previously represented Patten in a dispute with the Securities and Exchange Commission, which was fired in 2006.

coker father. He is represented by Mark Agnefello, who previously defended fraudster and “pharma bro” Martin Shkreli, film producer Harvey Weinstein, NXIVM leader Keith Raniere, and a Russian bank sanctioned for the invasion of Ukraine.

Patten was in good spirits in court on Tuesday, cracking jokes about CNBC’s coverage of the case and saying he was feeling fine. coker father. His wife, Susan, joined him, and he remained silent, with his hands folded or lying on his chin. The judge said a pre-hearing test on Tuesday morning revealed that both men had been drinking alcohol in their system. Coker said he and his wife had drinks for dinner the night before, while Patten has denied consuming any alcohol in the past 48 hours.

The judge said Patten also tested positive for buprenorphine, a drug prescribed by the U.S. Food and Drug Administration used to treat pain and opioid addiction. Patten denied taking it.

Patten and Coker are accused of numerous federal crimes, including fraud, for allegedly increasing the value of a publicly traded company that generated a market capitalization of more than $100 million last year despite owning only Deli City in Paulsboro, New Jersey. Noun. The deli makes less than $40,000 in sales annually.

Federal prosecutors have described the case as a story of international fraud and betrayal. Peter Cocker Jr., 53, the son of Cocker Sr., is based in Hong Kong and is considered divorced. Federal authorities sought to arrest Coker Sr. before agreeing to parole. He surrendered his passport to authorities in North Carolina on Friday. Neither he nor Patten were allowed to leave the continental United States.

The SEC also sued the men in a civil case over the alleged conspiracy.

The men were accused of being involved in Hometown International and a similar shell company called E-Waste. Prosecutors alleged that the men sought to enrich themselves by inflating the prices of Hometown International and E-Waste. At one time, their values ​​in the so-called over-the-counter markets rose by 939% and 19,900%, respectively.

The men are charged with conspiracy to commit securities fraud, securities fraud and conspiracy to manipulate securities prices. The penalty for fraud and fraud is up to 20 years and a fine of up to $5 million.

In addition, Patten is accused of securities fraud, wire fraud and money laundering.

According to the indictment, the men deceived the founders of Your Hometown Deli — Paul Morena, a former high school wrestling classmate at Patten, and Morena’s classmate Kristin Lindenmouth — into telling them that the overall company could help expand the restaurant. Neither Morena, the principal and wrestling coach at Bullsboro High School, nor Lindenmouth, a math teacher at the same school, are mentioned by name in the court documents.

Prosecutors said the men then coordinated to take control of the Hometown International stock and transfer it between themselves and their friends in order to inflate the share price.

Patten did not comment when asked Tuesday morning if he had spoken to Morena since then.

Prosecutors said Patten and Cokers personally enriched themselves with consulting contracts that paid $15,000 a month to Coker Sr., North Carolina-based Tryon Capital, and $25,000 a month to Coker Jr., VCH Ltd., based in Macau. James Patten was a partner in Tryon Capital.

The men had similar, albeit smaller, consulting contracts with E-Waste.

Authorities said the men eventually planned to use both Hometown International and E-Waste as vessels for reverse mergers, which would allow other companies to advertise the two cars.

When Makkamer Holding, a bioplastics company that began a reverse merger with Hometown International, selling prepared foods for $15,000. Deli is now permanently closed.

coker father. Patten has had a falling out with regulators and the law before.

coker father. He was sued in 1992 on charges of concealing funds from creditors and business fraud. He has denied wrongdoing in those cases, one of which has been settled out of court in recent years in North Carolina. In the same year, Coker Sr. He was also accused of indecent exposure to minors.

In 2006, Patten was banned from FINRA, the broker’s regulator and trader, for failing to comply with an arbitration award of more than $753,000 for violating securities laws, unauthorized trading, and disturbing a client’s account.

Patten pleaded guilty in 2010 to a federal mail fraud charge. The FBI said it sent an investor a fake financial statement after it took about half of the $538,000 you gave him for an investment and used it to cover bad investments he made using her account. He was sentenced to 27 months in prison.

The distinctive features surrounding Your Hometown Deli first caught the attention of hedge fund manager David Einhorn in 2021.

Pastrami must be great,” Einhorn said sarcastically at the time. After the indictments Last monthHe tweeted, “I think the pastrami wasn’t great.”

CNBC’s Dan Mangan contributed to this report.