$100M New Jersey deli fraudster James Patten sentenced to 21 months in prison

Key Points:

• James Patten was sentenced to 21 months in prison for his role in a stock manipulation scheme that inflated the market value of Hometown International, a company owning a small, unprofitable New Jersey deli, to $100 million.
• Judge Christine O'Hearn emphasized Patten's prior federal fraud conviction and noted that he initiated the deli stock fraud while still on supervised release and owing restitution from his previous sentence.
• Patten, the last of three defendants sentenced in the case, must also pay around $5 million in restitution and serve three years of supervised release; his co-conspirators, Peter Coker Sr. and Jr., received prison terms of six and 40 months respectively.
• The scheme involved artificially inflating the stock prices of Hometown International and a shell company, E-Waste, by 939% and 19,900%, respectively, to make them attractive for reverse mergers with private companies.
• The fraud came to light after CNBC's investigation, prompted by hedge fund manager David Einhorn's 2021 client letter questioning Hometown's high stock price despite its minimal assets, leading to charges filed in September 2022 and the deli's closure in 2022.