SOUTH JERSEY (KYW Newsradio) — A North Carolina man has admitted to his role in a stock fraud scene that centered around a small deli in Paulsboro, New Jersey.
James Patten, 64, pleaded guilty to securities fraud in federal court on Wednesday, the U.S. Attorney’s Office for the District of New Jersey said.
Patten and two other men were alleged to have engaged in a complex scheme to manipulate the price of publicly held stocks through a reverse merger with a shell company called Hometown International, which valued the little deli at $100 million as its only asset.
Caught up in this scheme was Paulsboro High School principal Paul Morina, the Hometown Deli owner. U.S. Attorney Philip Sellinger said this was all happening without Morina’s knowledge.
Securities fraud has a maximum penalty of 20 years in prison and a $5 million fine. Sentencing is scheduled for April.
The two other men in the scheme are awaiting trial.