Federal prosecutors are recommending a lenient prison sentence of 12 to 18 months for James Patten, who pleaded guilty in the $100 million New Jersey deli stock manipulation case. This recommendation is significantly lower than the 70-to-87-month term suggested by sentencing guidelines, with prosecutors citing disparities with co-defendants’ sentences and potentially undisclosed cooperation.
The scheme artificially inflated the stock of companies like Hometown International, a deli with a market cap exceeding $100 million, and the shell company E-Waste, resulting in millions in investor losses. Intriguingly, portions of the prosecutors’ sentencing submission remain redacted, with speculation pointing to cooperation agreements or sensitive personal information as the reason.
Feds Argue for Lighter Sentence in $100M NJ Deli Fraud Case, Citing Disparities and Cooperation
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Federal prosecutors are advocating for a significantly reduced prison sentence for James Patten, a key figure in the notorious $100 million New Jersey deli stock manipulation scheme. While advisory guidelines suggest a term of 70 to 87 months, the U.S. Attorney's Office for New Jersey is recommending a sentence between 12 and 18 months for Patten, a North Carolina resident who pleaded guilty to securities fraud in late 2023.
Courtroom sketch of James Patten, left, and attorney Ira Sorkin at N.J. District Court in Camden, N.J., Oct. 11, 2022. Source: Elizabeth Williams
The rationale behind this reduced recommendation hinges on the principle of avoiding "unwarranted sentence disparities among defendants with similar records." Prosecutors pointed to the sentences received by co-defendants Peter Coker Sr. and Peter Coker Jr., who were previously sentenced to six months and 40 months, respectively. The filing states that a sentence more severe than Patten's co-defendants, particularly Coker Sr.'s, would be "unfair." Both Cokers have completed their prison terms for their roles in the scheme.
Peter Coker Sr. and his wife, Susan Coker, at N.J. District Court in Camden, N.J., Oct. 11, 2022. Source: Jerry Frasier and Vinny Castaldo
The scheme involved artificially inflating the stock prices of two thinly traded companies, Hometown International and E-Waste. Hometown International, famously, was a company that owned only a single small, unprofitable deli in Paulsboro, New Jersey, yet its market capitalization once soared to over $100 million. E-Waste, a shell company, also saw its market cap reach significant heights. Investors reportedly lost nearly $5 million due to the scheme, including consulting fees paid to Patten and the Cokers.
Adding a layer of intrigue, three pages of the eleven-page sentencing submission from prosecutors are redacted. These blacked-out sections are understood to contain the specific reasons why prosecutors believe Patten warrants a substantial downward departure from the advisory sentencing guidelines. Court rules permit the redaction of sensitive personal information, details about victim and witness identities, and crucially, information regarding the cooperation of the defendant and others that has not been publicly disclosed.
Peter Coker Jr. is issued search warrants from police at his villa on the southern resort island of Phuket, Thailand, Jan. 11, 2023. Source: Crime Suppression Division, Royal Thai Police | AP
Despite the potential for cooperation, Patten's past criminal history is a factor prosecutors acknowledge. He was convicted of mail fraud in 2010 and served a 27-month prison sentence, being released in 2012. Prosecutors noted that his return to fraudulent activity so soon after his previous incarceration is a cause for concern. However, they also emphasize that Patten acted as an employee under the direction of Coker Sr., a factor that should be considered by the court.
The filings also hint at the existence of "at least two other potential defendants" who may face no legal consequences for their involvement in the scheme, further complicating the narrative of accountability.
James Patten is scheduled to be sentenced by U.S. District Court Judge Christine O'Hearn in Camden on July 21. His lawyer, Adam Brody, declined to comment on the case.
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