New Jersey fraud defendant Patten is not seeking arrest

The last defendant awaiting sentencing in a $100 million New Jersey stock fraud case is asking a judge to spare him prison — despite a previous conviction that landed him behind bars.

The defendant’s attorney, James Patten, in a new filing in New Jersey federal court cited the short prison sentence received by the defendant and his former employer, Peter Coker Sr.

“Mr. Patten was Peter Coker, Sr.’s employee in the conduct of the case,” wrote the lawyer, Adam Brody.

“Thus, if a sentence of six months in prison and six months of house arrest is the appropriate punishment for Peter Coker, Sr., then Mr. Patten is entitled to a lesser sentence.”

A third defendant, Coker’s son, Peter Coker Jr., received a 40-month sentence for his role in the scheme, and has since been released, as has his father.

Brody also cited former stockbroker Patten’s remorse for his securities fraud crimes, as well as his history of kidnappings, which included two in February and May, as other reasons for the prison sentence.

The filing said Patten, a resident of Winston-Salem, North Carolina, had been working as a Coca-Cola merchandise manager, and part-time at a bar and liquor store since pleading guilty in December 2023.

Prosecutors in late June asked Judge Christine O’Hearn to sentence Patten to between 12 and 18 months at her July 21 sentencing.

That’s much lower than the 70 to 87 months recommended by federal sentencing guidelines for Patten.

Prosecutors in their filing said giving Patten a harsher sentence than the Cokers would have been unfair, but they also said he deserved prison time.

“He was released in 2012, nearly two years before the conspiracy began,” prosecutors wrote. “A prison sentence is necessary because his return to fraud so soon after spending two years in prison is worrying.”

CNBC requested that both sides’ sentencing submissions be made public by the court. O’Hearn did so, but several pages of both the prosecution’s and defense’s motions were redacted for unspecified reasons.

Patten, Coker Sr., and Coker Jr. they admitted that they manipulated the stock prices of the two less-traded companies to make them more attractive to reverse the merger.

One of the companies, Hometown International, owned one small, money-losing store in Paulsboro, New Jersey – Your Home Deli – and the other, E-Waste, was a shell company with no major business operations.

Patten grew up in Paulsboro, where he was a high school wrestler. The deli was run by Patten’s friend and colleague, Paul Morina, a high school principal and famous wrestling coach, who was unaware of the stock-cheating scheme.

As a result of this program, the market capitalization of both companies at the same time exceeded $ 100 million.

Patten was convicted of an unrelated mail fraud charge in 2010 and sentenced to 27 months in prison.

“When I was released in 2012, I thought I had learned that I would never put myself or my family through that situation again,” Patten wrote in a letter to O’Hearn.

“But I failed,” he added.

Patten said in the letter that within two years of his release, “I began the road that brings me to the Court now.”

Brody in his filing said Coker Sr. hired Patten to help him in what turned out to be a stock manipulation scheme.

Patten told the judge that at the time I “felt lost and wanted to regain a sense of my former life” as a salesperson, but “there was no reputable company I was hiring for.”

“I should have said ‘no’ when this program was presented to me, and agreeing to participate will always be one of the worst mistakes of my life,” Patten wrote. “I knew the trick was wrong, but I ignored that voice in my head. I have no one to blame but myself.”

His attorney, Brody, in sentencing O’Hearn cited letters from Patten’s family and friends that the attorney said “paint a consistent and detailed picture of a man whose defining characteristics are an impressive work ethic, a deep devotion to family, and a desire to help others without expectation of reward.”