James Patten leaves U.S. District Court in Camden, New Jersey after his sentencing hearing on July 21, 2026.
Dan Mangan | CNBC
James Patten, who helped orchestrate a stock-price manipulation scheme that valued the company that owned a loss-making New Jersey deli to $100 million, was sentenced Tuesday to 21 months in prison.
Patten, 67, asked Judge Christine O’Hearn to sentence him to life in prison during a hearing in U.S. District Court in Camden, New Jersey, where he pleaded guilty in December 2023 to securities fraud and conspiracy charges.
But O’Hearn repeatedly cited Patten’s previous federal fraud conviction and related 27-month prison sentence, saying the Winston-Salem, N.C., resident deserved another prison sentence for the deli stock scam.
The judge noted that Patten activated the deli scheme while he was on supervised release for a criminal record, less than two years after his release, and while he was still owed restitution in the original case.
“This was his idea,” O’Hearn said.
But the judge said Patten’s cooperation with federal authorities in the investigation since his arrest in 2022 had been “substantial” and “beneficial” to the prosecution of co-conspirators Peter Coker Sr. and Peter Coker Jr. He also noted that his cooperation could assist in future prosecutions against others involved in the scheme.
Mr. Patten, a former stockbroker, is the last of three defendants sentenced in a securities fraud case involving Hometown International, the company that owns the deli, and E-Waste, a shell company.
“I stand before you today to apologize and take full responsibility for my actions,” Patten told the judge.
In a choked voice, he said he was “deeply sorry” for the impact his crimes had on his family and the young men he coached in wrestling.
“There’s no excuse,” he said.
“I have no comment,” Patten told CNBC as she left the courtroom with her partner and three sisters.
Patten will remain free until the Bureau of Prisons sets a surrender date. His attorney, Adam Brody, asked O’Hern to allow Patten to serve his sentence at a federal prison in Butner, North Carolina.
In addition to his 21-month prison sentence, Patten must serve three years of supervised release. He is also jointly liable with his co-defendants for more than $5.5 million in damages caused by investors.
These investors included not only Duke and Vanderbilt universities, but also individual purchasers of stocks in which Mr. Patten systematically made fraudulent trades to boost his company’s valuation. Both schools are obligated to pay approximately 95% of the compensation.
Patten’s co-conspirators, Coker Sr. and Coker Jr., are already serving six and 40 months in prison, respectively.
Federal prosecutors in New Jersey had asked for a sentence of 12 to 18 months in prison for Patten.
“This was a serious crime,” Assistant U.S. Attorney Aaron Webman told O’Hearn.
But Mr. Webman successfully argued that Mr. O’Hearn should depart significantly from federal sentencing guidelines, which suggest a sentence of 70 to 87 months in prison for Mr. Patten. Prosecutors pointed to Patten’s cooperation, free movement while awaiting sentencing, and the Coker family’s subordinate role in the scheme.
Messrs. Patten and Coker admitted to conspiring to inflate the stock price of Hometown International, which owns Your Hometown Deli and E-Waste in Paulsboro, New Jersey, through manipulated stock trades.
As a result, the stock prices of Hometown and EWAST were artificially inflated by 939% and 19,900%, respectively, prosecutors said.
The purpose of the plan was to make both companies more attractive candidates for a reverse merger with a private company wishing to go public. Both companies were later used in a reverse merger.
In 2014, Patten suggested forming Hometown as an umbrella company to former high school wrestling teammate Paul Molina, who at the time was talking with someone else about opening a deli in Paulsboro. Authorities said Molina and a fellow deli owner had no knowledge of Patten’s plan to manipulate Hometown stock.
Molina is a high school principal and a famous wrestling coach.
The charges against Patten and the Cokers were filed in September 2022, more than a year after CNBC detailed a series of questionable relationships between Hometown and E-Waste, Patten’s previous criminal and civil court matters, matters with Coker Sr., and consulting contracts with companies that benefited the couple. Your Hometown Deli closed in early 2022.
CNBC’s reporting began with a letter from hedge fund manager David Einhorn to clients in April 2021 that highlighted Hometown International’s odd stock price given its extremely poor single asset: deli.
“The pastrami must be amazing,” Einhorn wrote in the letter.
