New Jersey Daily Fraud defendant Patton doesn’t want to go to jail

The final defendant awaiting sentencing in the brazen $100 million New Jersey Daily stock rigging scandal is asking a judge not to sentence him to prison — despite already being found guilty of a serious crime that would have sent him to prison.

James Patton, an attorney for the defendants, cited the short prison sentence received by his co-defendant and former employer, Peter Coker Sr., in a new filing in New Jersey federal court.

“Mr. Patton was an employee of Peter Coker, Sr. in the conduct of the crime,” attorney Adam Brody wrote.

“Accordingly, if a sentence of six months’ imprisonment and six months’ home detention is an appropriate sentence for Peter Coker, Sr., then certainly Mr. Patton deserves a lesser sentence.”

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

Brody also cited former stockbroker Patton’s remorse for securities fraud convictions and his history of recovery, including two in February and May, as other reasons for a non-prison sentence.

The filing revealed that Patton, a Winston-Salem, North Carolina, resident, has been working for Coca-Cola as a warehouse materials handler and a part-time assistant in a taproom and brewery since pleading guilty in December 2023.

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

This is significantly less than the range of between 70 and 87 months suggested by federal sentencing guidelines for Patton.

Prosecutors said in their filing that it would be unfair to give Patton a more severe sentence than the Cokers, but they also said he deserves to remain in prison.

“He was released in 2012, approximately two years before the beginning of this conspiracy,” prosecutors wrote. “A prison sentence is necessary as his return to fraud so soon after spending almost two years in prison is disturbing.”

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

Patton, Coker Sr. and Coker Jr. admitted to masterminding a scheme to artificially inflate the stock prices of two thinly traded companies to make them attractive candidates for a reverse merger.

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

Patton grew up in Paulsboro, where he was an outstanding high school wrestler. The deli was run by Patton’s friend and teammate, Paul Morina, a high school principal and renowned wrestling coach, who was unaware of the stock manipulation scheme.

As a result of the plan, the market capitalization of both companies at one point exceeded $100 million.

Patton was convicted in 2010 in an unrelated mail fraud case and sentenced to 27 months in prison.

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

He added, “But I failed.”

In the letter Patton said that within two years of his release, “I began down the path that now brings me before the court.”

Brody said in his filing that Coker Sr. recruited Patton to assist him in a stock manipulation scheme.

Patton told the judge that as a broker at the time “I was feeling lost and desperate to get back some sense of my former life”, but “no reputable firm would hire me.”

Patton wrote, “When this scheme was presented to me I should have said ‘no’ and agreeing to participate in it will always be one of the worst mistakes of my life.” “I knew the plan was wrong, but I ignored the voice in my head. I have no one to blame but myself.”

His attorney Brody, at O’Hern’s sentencing, cited letters from Patton’s family and friends that the attorney said “paint a consistent and detailed portrait of a man whose defining characteristics were an impressive work ethic, deep devotion to family, and a willingness to help others without expectation of reward.”