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Defendant in NJ deli inventory fraud case makes $2,500 a month from comparable shell firm – CNBC


Courtroom sketch of James Patten, left, and lawyer Ira Sorkin at N.J. District Courtroom in Camden, N.J., Oct. 11, 2022

Supply: Elizabeth Williams

One of many males charged in an alleged stock manipulation scheme involving shell companies and a small-town New Jersey deli is making hundreds of {dollars} from one other shell firm, in response to a securities filing

James Patten, was charged with federal crimes final month for allegedly inflating the worth of Hometown Worldwide, which owned the deli, and E-Waste, which had no precise enterprise.

Patten can also be concerned in an organization referred to as Med Spa Holidays, which reported bills of $93,999 and no income through the quarter that ended Sept. 30. Med Spa, which wasn’t named within the indictment, additionally pays $2,500 a month in consulting charges to Patten’s agency Benchmark Capital.

Benchmark Capital additionally used to obtain $5,000 a month in consulting charges from E-Waste, in response to the Justice Division. A criticism from the Securities and Trade Fee stated the Benchmark Capital settlement with E-Waste “didn’t disclose the connection between Patten and E-Waste.”

Patten’s title hasn’t appeared in Med Spa filings.

Patten lawyer Ira Sorkin declined to remark. A spokesperson for the Justice Division might “solely affirm the presently pending expenses.”

Prosecutors accused Patten, together with father-and-son duo Peter Coker Sr. and Peter Coker Jr., of enriching themselves via consulting agreements that the SEC says lacked correct disclosure. Authorities additionally stated they artificially inflated the market worth of Hometown Worldwide and E-Waste by 939% and 19,900% respectively.

Round half of Med Spa’s shares are owned by International Fairness Restricted, the place Patten is a senior vp. About 10% of the corporate is held by Coker Sr.’s spouse, Dina Coker, and 16.63% is owned by Hometown International Providers, which is managed by Coker Sr.

Coker Sr. had an identical consulting settlement with Med Spa that paid him $2,500 between February and June 2021 via Tryon Capital, an organization Coker Sr. controls. Tryon was additionally Coker Sr.’s vessel of selection for funneling funds from each Hometown Worldwide and E-Waste, in response to his indictment.

The SEC stated the consulting agreements for E-Waste and Hometown Worldwide had been used to “reap ill-gotten positive factors from the scheme” and that the consulting companies promised had been both “pointless, not carried out, or had been in furtherance of the scheme.”

Med Spa, regardless of its zero income, has a protracted record of consulting agreements. One since-terminated deal paid $4,000 a month to Med Spa’s former president Elliot Mermel via his firm, Benzions. The settlement was terminated in 2021.

Mermel, who served as president for each E-Waste and Med Spa Holidays, has a colourful enterprise profession, together with a company that raised crickets as human food and a cannabis company that partnered with Paul Pierce, the former Boston Celtics superstar

Med Spa was additionally briefly led by Patten’s longtime buddy John Rollo, one other former E-Waste president and a Grammy-award profitable producer who labored most not too long ago as a affected person transporter at a New Jersey hospital.

Neither Mermel nor Rollo had been indicted alongside their associates for the E-Waste fraud allegations. They had been succeeded of their Med Spa management by Irwin Schneidmill.

Schneidmill declined to remark when contacted by CNBC. Rollo’s telephone quantity, listed by the SEC, had been disconnected, and Mermel didn’t instantly reply to a request for remark.

Like the opposite two shell firms, Med Spa Holidays had an preliminary enterprise objective—on this case, “specialised wellness trip packages”—that was deserted in favor of initiating a reverse merger. The indictment notes the E-Waste and Hometown Worldwide reverse mergers as the tactic by which the boys would earn “vital revenue ensuing from market manipulation.”

Med Spa is presently searching for an organization with which to finish a reverse merger.


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