Hometown Deli, Paulsboro, N.J.
Mike Calia | CNBC
Three men were charged with fraud and other crimes in a scheme involving a company that was worth $100 million in the stock market despite having only a small-town New Jersey deli to its name, federal authorities said Monday.
The three men – 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, China – were charged with 12 counts, including conspiracy to commit securities fraud, securities fraud and conspiracy to manipulate securities prices. Federal prosecutors said Patten is also charged with four counts of manipulation of securities, four counts of wire fraud, and a count of money laundering.
The men were also accused of market manipulation by the U.S. Securities and Exchange Commission.
Your Hometown Deli, the business at the center of the probe, was located in Paulsboro, New Jersey, over the Delaware River from Philadelphia. The deli, lauded for its cheesesteaks and Italian subs, made under $40,000 in annual revenue and closed earlier this year. The parent company, Hometown International, had merged with a bioplastics company.
The $100 million New Jersey deli, as Your Hometown Deli came to be known, was first brought to the public’s attention by investor David Einhorn in a letter to clients. CNBC reported further on the company, including by unearthing more details about the company’s then-CEO, Paul Morino, a legendary high school wrestling coach in southern New Jersey.
Patten, one of the men charged in the scheme, wrestled in high school with Morina.
The Cokers and Patten The securities fraud and securities price manipulation counts carry maximum penalties of 20 years in prison and a $5 million fine. The wire fraud and money laundering counts also have maximum penalties of 20 years in prison. The conspiracy to commit securities fraud and conspiracy to manipulate securities prices counts each carry a maximum penalty of five years in prison.
Read the full indictment here.
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