$100 million stock scam centered on small New Jersey delicatessen, prosecutors say | American News
A father and son have been charged with fraud over an alleged $100 million stock scam that attempted to massively inflate the value of a small New Jersey deli.
Known for its cheesesteaks and Italian subs, Your Hometown Deli made less than $40,000 (£37,000) a year.
But after the owners of the grocery store were convinced to put it under the control of an umbrella company called Hometown International, three men allegedly “artificially inflated” the stock’s value by 939%.
Now three men, James Patten, 63, Peter Coker Sr, 80, and Peter Coker Jr, 53, have been charged with 12 counts, including conspiracy to commit securities fraud, fraud in securities and conspiracy to manipulate securities prices, US Department of Justice. announcement.
Federal prosecutors said Patten was also charged with four counts of securities manipulation, four counts of wire fraud and one count of money laundering.
The men have also been charged with market manipulation by the United States Securities and Exchange Commission.
“Unbeknownst to the deli owners, almost immediately after the formation of Hometown International, Patten and his associates began positioning Hometown International as a vehicle for a reverse merger that would yield them substantial profits,” prosecutors said.
The Cokers and Patten face heavy prison sentences and fines. The counts of securities fraud and securities price manipulation carry maximum penalties of 20 years in prison and a $5 million fine.
Counts of wire fraud and money laundering also carry maximum penalties of 20 years in prison.