$100 million deli in NJ closed, father and son charged with massive fraud
What started as two friends looking to start a local deli officially became one of the biggest fraud cases of the decade on Monday. Both the Department of Justice and Securities & Exchange Commission are seeking separate penalties for three conmen – including a father and son – for pumping up the value of a deli to $100 million dollars.
The scheme involved turning Hometown Deli into a publicly traded entity, which is an absurd prospect. Especially when the establishment meant to be worth $100 million looks like this on the inside:
I’m not here to deli-shame. I’m sure they put together quality food at quality prices. Even so, if any deli was meant to be worth that much money, it wouldn’t look like that.
As a result, 63-year-old James Patten, 80-year-old Peter Coker Sr., and 53-year-old Peter Coker Jr. are all accused of manipulating the corporation’s share price without the knowledge of the actual owners. I mean… yeah. No shit, right?
Here’s how the deli scheme worked, per The Daily Beast.
Their alleged crimes were relatively simple. Through coordinated trades, they “injected inaccurate information into the marketplace, creating false impressions of supply and demand.” From the outside, it looked like independent investors were hugely interested in the two companies’ stocks; shares of Hometown International eventually skyrocketed 939 percent, according to the DOJ, while E-Waste soared 19,900 percent.
To conceal their activity, the defendants allegedly gave shares in the businesses “to family members, friends, and associates,” and also “gained control over their trading accounts by obtaining their log-in information.”
Before we go any further, it’s important to acknowledge that this is truly one of the most New Jersey stories of all time. It could genuinely be a subplot of a present-day episode of The Sopranos.
Hell, there’s even a waste management company involved. I have all the love in the world for Jersey, but this is almost a little too on the nose.
There is so much going on in this story besides New Jersey being itself. For example, Coker Jr. was apparently in Hong Kong at the time of the initial arrests.
Hong Kong?? Hello??? No American national accused of a crime stateside while living in Hong Kong has ever been innocent. I don’t have the exact numbers on that but I’m sure you can find them somewhere.
Plus, just look at these guys. Open and shut case, boys. Let’s go home.
Guilty or not, however, I’m peeved these guys got arrested. We have far more serious financial crimes being committed in this country; often by those in positions of power in the government.
It seems a bit like the pot calling the kettle out for ill-gotten financial gain, but if the pot somehow got away with it in broad daylight on a daily basis. Not the perfect analogy, but you understand my point.
These guys didn’t even get to spend a single cent of the deli-scheme money. Talk about disappointing.
At the same time, they really did do a horrible job with this scheme. Hometown Deli brought in a maximum of $40,000 a year in sales, yet at its peak boasted a nine-figure valuation.
While that’s still more profitable than Twitter, which has a valuation in the tens of millions, I can see how one is a little more based in concrete sales numbers.
Regardless of how I feel about any of this, the three men now face serious penalties. The charges of securities fraud, manipulation of securities prices, wire fraud, and money laundering each come with a maximum prison sentence of 20 years. Plus, they could be subject to hundreds of thousands if not millions in fines.