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Three men charged with fraud in $100 million Latest Jersey deli scheme


Hometown Deli, Paulsboro, N.J.

Mike Calia | CNBC

Three men were charged with fraud and other crimes in a scheme involving an organization that was price $100 million within the stock market despite having only a small-town Latest Jersey deli to its name, federal authorities said Monday.

The boys – James Patten, 63, of Winston-Salem, North Carolina; Peter Coker Sr., 80, of Chapel Hill, North Carolina; and Peter Coker Jr., 53, of Hong Kong – were charged with 12 counts, including conspiracy to commit securities fraud, securities fraud and conspiracy to control securities prices. Patten and Coker Sr. were arrested and appeared in a North Carolina court on Monday. They’re expected to look in Latest Jersey federal court at a later date. Coker Jr. continues to be at large.

Federal prosecutors said Patten can be charged with 4 counts of manipulation of securities, 4 counts of wire fraud, and a count of cash laundering. The boys were also accused of market manipulation by the U.S. Securities and Exchange Commission. The SEC said its investigation is ongoing.

Coker Jr. was chairman of Hometown International, while Coker Sr. was a serious shareholder. There have been no lawyers of record for the defendants as of Monday afternoon, in line with the U.S. Attorney’s Office in Latest Jersey.

Your Hometown Deli, the business at the middle of the probe, was positioned in Paulsboro, Latest Jersey, over the Delaware River from Philadelphia. The deli, lauded for its cheesesteaks and Italian subs, had under $40,000 in annual revenue and closed earlier this yr. The parent company, Hometown International, had merged with a bioplastics company. Fellow shell company E-Waste, which shared connections with the deli owner, also merged with one other firm last yr.

The controversy surrounding Your Hometown Deli and the people involved in it prompted questions on whether its parent company was operating throughout the law. The accusations are also connected to the lads’s involvement in E-Waste.

The $100 million Latest Jersey deli, as Your Hometown Deli got here to be known, was first dropped at the general public’s attention by investor David Einhorn in a 2021 letter to clients. CNBC reported further on the corporate, including by unearthing more details about its then-CEO, Paul Morina, a legendary highschool wrestling coach in southern Latest Jersey. Morina was later fired as CEO. An attempt to succeed in Morina was unsuccessful.

Patten, certainly one of the lads charged within the scheme, wrestled in highschool with Morina. Prosecutors said Patten convinced the owners of the deli, which was established in 2014, to place it under the control of an umbrella company, called Hometown International.

“Unbeknownst to the deli owners, almost immediately after Hometown International was formed, Patten and his associates began positioning Hometown International as a vehicle for a reverse merger that might yield substantial profit to them,” prosecutors said in a release.

In 2019, Hometown International began selling shares on what’s generally known as the OTC Marketplace, where stock of small corporations is traded.

“Shortly thereafter, Patten, Coker Sr., And Coker Jr. undertook a calculated scheme to achieve control of Hometown International’s management and its shares from the deli owners,” prosecutors said. The boys took similar actions to take control of E-Waste, prosecutors said. That company’s shares surged, too, though it did not have any real business, in line with CNBC reporting.

Prosecutors said the tactics “artificially inflated” the values of Hometown International and E-Waste stock by 939% and 19,900%, respectively.

As of last yr, Patten was barred by FINRA, the broker-dealer regulator, from acting as a stockbroker or associating with broker-dealers. He was the topic of repeated disciplinary actions by FINRA. In 2006, he successfully appealed sanctions issued by an SEC judge in a case where he was accused of manipulating the worth of a stock listed on the Nasdaq. Patten was defended in that matter by Ira Sorkin, who was best known for representing Ponzi scheme kingpin Bernie Madoff.

The Cokers and Patten face steep prison sentences and fines. The securities fraud and securities price manipulation counts carry maximum penalties of 20 years in prison and a $5 million effective. The wire fraud and money laundering counts even have maximum penalties of 20 years in prison. The conspiracy to commit securities fraud and conspiracy to control securities prices counts each carry a maximum penalty of 5 years in prison.

Coker Jr. and Sr. are father and son. CNBC had previously reported on their business dealings and other misadventures.

Read the total indictment here.

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