Father-son duo charged with fraud, market manipulation in $100 million New Jersey deli scheme

Three men, including a father and a son, were charged with 12 counts of fraud for their involvement in a scheme that valued their company over $100 million in the stock market despite its only source of profit being a small-town New Jersey deli.

According to federal indictment documents, authorities announced the charges and arrests Monday of 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.

The charges for the three men included: conspiracy to commit securities fraud, securities fraud and conspiracy to manipulate securities prices. Patten is also being charged charged with four counts of manipulation of securities, four counts of wire fraud, and a count of money laundering.

According to the U.S. Securities and Exchange Commission, which has an ongoing investigation into the matter, the three men collectively were also accused of market manipulation. New Jersey prosecutors said the men conspired since 2014 to inflate the prices of two publicly-traded companies, Hometown International and E-Waste Corp, through manipulative trading – using the companies to generate illegal profits.

Patten and Coker Sr. were arrested and appeared in a North Carolina court Monday. Coker Jr. is still at large.

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The “$100 million deli,” as it became known in its small town Philadelphia suburb, Paulsboro, New Jersey, was called “Your Hometown Deli” and was best known for its subs and cheesesteaks. It only generated $13,976 of sales in 2020 and $25,004 in 2021 during the coronavirus pandemic, ultimately prompting it to shut down this past June. 

The deli drew national attention in April 2021 after hedge fund manager David Einhorn mentioned it in a letter to shareholders, warning them of need for more oversight. “The pastrami must be amazing,” Einhorn sarcastically wrote.

The Cokers, who are father and son, and Patten face steep prison sentences, with maximum counts up to 20 years for their crimes. No lawyers were listed on the indictment documents for the three men.