Federal prosecutors are asking a judge to sentence former stockbroker James Patten to just 12 to 18 months in prison for his role in the infamous $100 million New Jersey deli stock-manipulation case. That's far below the 70 to 87 months recommended by federal sentencing guidelines, according to a CNBC report on Friday.
The request, filed in a sentencing memo ahead of Patten's July 21 hearing before U.S. District Judge Christine O'Hearn in Camden, argues that a shorter term would avoid "unwarranted sentence disparities among defendants with similar records who have been found guilty of similar conduct." Prosecutors noted that Patten's co-defendants got much lighter sentences: Peter Coker Sr. received six months, and Peter Coker Jr. got 40 months. "A sentence more severe than his co-defendants', particularly Coker, Sr.'s, would be unfair," they wrote.
The case became a sensation because of its sheer absurdity. Hometown International, which owned a single, unprofitable deli in Paulsboro, New Jersey, somehow reached a market capitalization of over $100 million. A second company, E-Waste, a shell with little actual business, also saw its valuation soar as part of the same alleged manipulation scheme. Authorities said the inflated stock prices made both companies more attractive for reverse mergers, and investors ultimately lost nearly $5 million, including consulting fees paid to Patten and the Cokers.
Here's where it gets murky: While prosecutors publicly outlined some reasons for seeking a reduced sentence, three of the filing's 11 pages remain heavily redacted. That means the government's full justification for asking for such a big downward variance is hidden from public view.
Despite the lenient request, prosecutors aren't letting Patten off easy. They said he "participated in a serious crime" and "played an important role" in the fraud. They also pointed to his criminal history: a 2010 mail fraud conviction that landed him in prison for about two years until 2012. "A prison sentence is necessary because his return to fraud so soon after spending approximately two years in prison is troubling," they wrote.
So the DOJ wants Patten behind bars—just not for as long as the guidelines say. And we may never know exactly why.
