James Patten leaves US District Court in Camden, New Jersey, after his sentencing hearing on July 21, 2026.
Dan Manga | CNBC
James Patten, who played a key role in a stock fraud scheme that led to a publicly traded company that owned a small, money-losing New Jersey store with a market capitalization of $100 million, was sentenced Tuesday to 21 months in prison.
Patten, 67, asked Judge Christine O’Hearn to give him a life sentence during a trial in US District Court in Camden, New Jersey, the same court where he pleaded guilty to fraud in December 2023.
But O’Hearn repeatedly cited Patten’s fraud conviction, which resulted in him being sentenced to 27 months in prison, before the Winston-Salem, North Carolina resident was eligible for more prison time for his role in the stock fraud.
The judge noted that Patten began the sale while he was on probation for a previous conviction, less than two years after being released from prison, and while he still owed restitution on the first charge.
“This is his idea,” O’Hearn said.
However, the judge said that Patten’s cooperation with federal authorities in the investigation of the case since his arrest in 2022 was “substantial” and was helpful in the prosecution of two accomplices, Peter Coker Sr. and Peter Coker Jr., who both pleaded guilty, and possible future prosecutions of others involved in the scheme.
Patten, a former stockbroker, is the last of three defendants to be convicted in the securities fraud case involving the deli.
“I stand before you today to apologize, I take full responsibility for my actions,” Patten told the judge, before collapsing as he said he was “very sorry” for the impact of his crime on his family, and on the youth he trained to fight.
“There are no excuses,” he said.
As he left court with his partner and three sisters, Patten told CNBC, “I have no comment.”
In addition to his 21-month sentence, Patten must serve three years of supervised release and is required to pay approximately $5 million in restitution.
Patten’s partners, Coker Sr. and Coker Jr., have completed their prison sentences, which were six months and 40 months respectively.
The US Attorney’s Office in New Jersey had requested that O’Hearn give Patten a sentence of 12 to 18 months in prison.
“This was a very serious crime,” said Assistant U.S. Attorney Aaron Webman.
Patten and the Cokers pleaded guilty to conspiring to inflate the stock price of Hometown International, the company that owns Your Hometown Deli in Paulsboro, New Jersey, and the shell company, E-Waste, through stock trading.
As a result, the stock prices of Hometown and E-Waste were improperly inflated by 939% and 19,900%, respectively, prosecutors said.
The purpose of this plan was to make both companies more attractive candidates for a reverse merger with private companies that wanted to go public. Both companies later underwent a reverse merger.
In 2014, Patten suggested creating Hometown as an umbrella organization to his former high school classmate, Paul Morina, who was discussing opening a deli in Paulsboro at the time with someone else. Morina and another deli owner were unaware of Patten’s plan to defraud Hometown’s stock, authorities said.
Morina is a high school principal and a well-known wrestling coach.
Charges were filed against Patten and the Cokers in September 2022, more than a year after CNBC described a series of questionable connections between Hometown and E-Waste, Patten’s past criminal and civil court issues, as well as those of Coker Sr., and consulting deals with companies that benefited the two men. Your Hometown Deli is closing in early 2022.
CNBC’s reporting was triggered by a client letter sent by hedge fund manager David Einhorn in April 2021, which highlighted Hometown International’s outrageous stock price given its one very small deli holding.
“Pastrami must be amazing,” Einhorn wrote in that book.
