$100M Deli Scheme In South Jersey Leads To Charges For 3 Men

PAULSBORO, NJ — A South Jersey deli was central to an international market manipulation scheme run by three men who have been charged in federal court, U.S. Attorney Philip R. Sellinger announced.

The restaurant, Your Hometown Deli, is located at 541 Mantua Avenue in Paulsboro. The company saw its stock market value increase to $100 million during the coronavirus pandemic, as Patch reported previously.

James Patten, 63, of Winston-Salem, North Carolina and father and son duo Peter Coker Sr., 80, of Chapel Hill, N.C.; and Peter Coker Jr., 53, of Hong Kong, China, are named in a 12-count indictment charging conspiracy to commit securities fraud, securities fraud, and conspiracy to manipulate securities prices. Patten is also charged with four counts of manipulation of securities, four counts of wire fraud, and one count of money laundering, Sellinger said.

Patten and Coker Sr. are in police custody and are scheduled to appear before U.S. Magistrate Judge L. Patrick Auld in federal court in the Middle District of North Carolina, Sellinger said. Coker Jr. "remains at large," according to Sellinger.

Patten and Coker Sr. will appear in New Jersey district court at a later date, Sellinger said.

In 2014, a friend of Patton's was looking to open a local deli in Paulsboro. Patten suggested the creation of an umbrella corporation, Hometown International, to house the deli under. Patten lived in Basking Ridge at the time, court documents show.

Two people were listed as controllers of the deli and Hometown International, but "Patten acted as an unnamed control person and handled the majority of corporate-related decisions, issues, and tasks," court documents show. Hometown International, Inc. is incorporated in Nevada, according to a Securities and Exchange Commission filing.

Patten, Coker Sr., and Coker Jr. "undertook a calculated scheme" to gain control of Hometown International's shares in 2019 and transfer them to friends, family, and associates, officials said. In 2020, court documents show, the three men arranged for approximately 3.5 million Hometown International shares to be transferred to entities in Macau, China that Coker Jr. controlled (the shares were in other peoples' names).

Patten, Coker Sr., and Coker Jr. had the ability to trade shares on the mid-tier OTCQB marketplace because of how the shares were inflated, giving them greater ability to trade without price restrictions, officials said.

In 2020, Patten recruited another friend to control stock E-Waste, another publicly-traded company. He, Coker Sr., and Coker Jr. began artificially inflating E-Waste's stock prices and transferring shares to themselves and people they knew, Sellinger said.

"Once the defendants gained control of Hometown International and E-Waste’s shares, they arranged for the transfer of millions of shares of stock to a number of nominee entities, including entities controlled by Coker Jr., in an effort to mask their control of the shares," Sellinger said.

Officials said Patten, Coker Sr., and Coker Jr. have not sold these shares off yet.

"Their scheme had the ultimate impact of artificially inflating Hometown International’s stock by approximately 939 percent and E-Waste’s stock by approximately 19,900 percent," officials said.

In a separate civil action, Sellinger said, the Securities and Exchange Commission has filed a complaint in the District of New Jersey charging Patten, Coker Sr., and Coker Jr. "based on the allegations underlying the market manipulation scheme."

According to Sellinger's office, "The securities fraud and manipulation of securities prices counts each carry a maximum penalty of 20 years in prison and a $5 million fine. The wire fraud and money laundering counts are punishable by a maximum penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense, whichever is greatest. The counts of conspiracy to commit securities fraud and conspiracy to manipulate securities prices both carry a maximum penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense whichever is greatest."