James Patten, who helped inflate a deli company's stock to $100M, gets 21 months for securities fraud. The scheme involved a small New Jersey deli.
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James Patten, the man behind a stock manipulation scheme that gave a tiny New Jersey deli a $100 million market value, was sentenced Tuesday to 21 months in prison.
Patten, 67, pleaded guilty to securities fraud in the case. His co-conspirators, Peter Coker Sr. and Peter Coker Jr., have already served their sentences – six months and 40 months, respectively.
The scheme ran through Hometown International, the company that owned Your Hometown Deli in Paulsboro, New Jersey. Patten and the Cokers admitted to driving up the stock price of Hometown and a shell company called E-Waste through manipulated trading. Prosecutors said Hometown's stock was inflated by 939% and E-Waste's by 19,900%.
The goal was to make both companies attractive targets for reverse mergers with private firms that wanted to go public.
Patten had asked Judge Christine O'Hearn to give him no prison time. The U.S. Attorney's Office in New Jersey had requested 12 to 18 months. O'Hearn gave him 21 months.
Patten had a prior federal mail fraud conviction that landed him 27 months behind bars.
Charges were filed in September 2022, more than a year after CNBC detailed the connections between Hometown and E-Waste, Patten's criminal history, and consulting deals that benefited him and Coker Sr.
CNBC's reporting was triggered by a client letter from hedge fund manager David Einhorn in April 2021. Einhorn highlighted Hometown's bizarre stock price given its single asset – a small, underperforming deli. "The pastrami must be amazing," he wrote.
Your Hometown Deli closed earlier in 2022.
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