Federal prosecutors ask judge to postpone SEC civil case involving the $100 million NJ deli

Federal prosecutors successful New Jersey privation the Securities and Exchange Commission to postpone its civilian lawsuit against the alleged masterminds down a $100 cardinal fraud strategy involving a small-town deli truthful it won't get successful the mode of their ongoing transgression case. 

Prosecutors for the District of New Jersey filed a question connected Wednesday saying the SEC's lawsuit "substantially" overlaps with their ongoing transgression lawsuit and the civilian substance should beryllium postponed until the litigation, including a imaginable trial, is completed, tribunal records show. 

Postponing the civilian lawsuit would "preserve the integrity" of the ongoing prosecution by preventing the defendants from seeing the grade of the government's grounds against them, national prosecutors argued successful the filing. 

During the find signifier of civilian and transgression matters, defendants person the quality to spot the grounds that's going to beryllium utilized against them successful proceedings but they person entree to acold much materials successful civilian matters due to the fact that the confines are broader. 

The SEC and the attorneys for the suspects consented to the request, which is communal successful specified cases. Judge Christine O'Hearn has yet to regularisation connected the matter. 

A telephone league is scheduled successful the transgression lawsuit for Dec. 14, but it's expected to beryllium mostly procedural and an accidental for the prosecutors and defence attorneys to update the justice connected the presumption of the litigation. 

In September, James Patten and father-and-son duo Peter Coker Sr. and Peter Coker Jr. were arrested and charged with securities fraud for allegedly orchestrating a strategy that inflated the prices of 2 publically traded companies, Hometown International and E-Waste Corp, a ammunition company.

Makamer, a bioplastics startup, merged with Hometown International, earlier this year.

Even though Hometown International's lone plus was Your Hometown Deli, a now-closed tiny sandwich store successful Paulsboro, New Jersey, that had nether $40,000 successful yearly revenue, the trio utilized manipulative trading to inflate its marketplace capitalization to much than $100 million, prosecutors alleged. 

The strategy began erstwhile Patten convinced the proprietor of Your Hometown Deli, esteemed section precocious schoolhouse wrestling manager and main Paul Morina, to enactment the edifice nether the power of Hometown International, an umbrella institution they created, prosecutors alleged

"Unbeknownst to the deli owners, astir instantly aft Hometown International was formed, Patten and his associates began positioning Hometown International arsenic a conveyance for a reverse merger that would output important nett to them," prosecutors said antecedently successful a quality release. 

"Shortly thereafter, Patten, Coker Sr., and Coker Jr. undertook a calculated strategy to summation power of Hometown International's absorption and its shares from the deli owners."

The men concocted a akin strategy to instrumentality power of E-Waste. The tactics "artificially inflated" the values of Hometown International and E-Waste banal by 939% and 19,900%, respectively, prosecutors said. 

Coker Sr. and Patten person pleaded not guilty.

Patten's lawyer Ira Sorkin, the high-profile litigator who erstwhile repped the notorious Ponzi strategy fraudster Bernie Madoff, didn't remark erstwhile asked whether the lawsuit is expected to spell to trial. 

Coker Sr.'s lawyer Marc Agnifilo, who antecedently defended "pharma bro" Martin Shkreli and disgraced movie shaper Harvey Weinstein, couldn't beryllium reached. It's not wide whether the Hong Kong-based Coker Jr. has an attorney, and helium remains a fugitive. Morina didn't respond to a petition for comment. 

Patten, Coker Sr. and Coker Jr. were charged a small implicit a twelvemonth aft Hometown International's dubious banal was revealed by hedge money manager David Einhorn successful a missive to clients informing of the dangers retail investors face. 

"Someone pointed america to Hometown International (HWIN), which owns a azygous deli successful agrarian New Jersey ... HWIN reached a marketplace headdress of $113 cardinal connected February 8. The largest shareholder is besides the CEO/CFO/Treasurer and a Director, who besides happens to beryllium the wrestling manager of the precocious schoolhouse adjacent doorway to the deli," Einhorn said successful the April 2021 letter. "The pastrami indispensable beryllium amazing."

After quality of the indictment broke, he quipped connected Twitter: "I conjecture the Pastrami wasn't truthful great."