Courtroom sketch of James Patten, left, and attorney Ira Sorkin at N.J. District Court in Camden, N.J., Oct. 11, 2022
Source: Elizabeth Williams
James Patten, who played a key role in the brazen stock manipulation scheme that led to a publicly traded company that owned a small, money-losing New Jersey deli having a market capitalization of $100 million, was sentenced Tuesday to 21 months in prison.
Patten, 67, previously pleaded guilty to securities fraud in the case in U.S District Court in Camden, New Jersey.
The North Carolina resident’s co-conspirators, Peter Coker Sr. and Peter Coker Jr., have already served their prison sentences, which were six months and 40 months, respectively.
Patten, who previously was convicted of mail fraud in an unrelated case for which he served 27 months in prison, had asked Judge Christine O’Hearn to sentence him to no time in prison in the deli fraud case.
The U.S. Attorney’s Office in New Jersey had requested that O’Hearn give him a sentence of between 12 to 18 months in prison.
Patten and the Cokers admitted to plotting to drive up the share price of Hometown International, the company that owned the Your Hometown Deli in Paulsboro, New Jersey, and the share price of a shell company, E-Waste, through manipulated trading.
As a result, Hometown and E-Waste’s stock prices were artificially inflated by 939% and 19,900%, respectively, prosecutors have said.
The goal of the scheme was to make both companies more attractive candidates for reverse mergers with private companies that wanted to become publicly traded.
In 2014, Patten suggested the creation of Hometown as an umbrella corporation to a high school wrestling teammate, Paul Morina and another person were discussing opening a deli in Paulsboro at the time. Morina and the other deli owner were unaware of Patten’s scheme to manipulate Hometown’s stock, authorities have said.
Morina is a high school principal and renowned wrestling coach.
Charges were filed against Patten and the Cokers in September 2022, more than a year after CNBC detailed a series of questionable connections between Hometown and E-Waste, Patten’s prior criminal and civil court issues, as well as that of Coker Sr., and consulting deals with the companies that benefitted those two men. Your Hometown Deli closed earlier in 2022.
CNBC’s reporting was kicked off by a client letter that hedge fund mamager David Einhorn sent clients in April 2021, which highlighted Hometown International’s bizarre stock price given its very meager single asset of the deli.
“The pastrami must be amazing,” Einhorn wrote in that letter.
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