A father and son have been charged with fraud over an alleged $100m stock market scam that tried to massively inflate the value of a small deli in New Jersey.
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 deli were convinced to put it under control of an umbrella company called Hometown International, three men allegedly “artificially inflated” stock values 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, securities fraud and conspiracy to manipulate securities prices, the US Department of Justice announced.
Federal prosecutors said Patten was also charged with four counts of manipulation of securities, four counts of wire fraud, and a count of money laundering.
The men were also accused of market manipulation by the US Securities and Exchange Commission.
“Unbeknownst to the deli owners, almost immediately after Hometown International was formed, Patten and his associates began positioning Hometown International as a vehicle for a reverse merger that would yield substantial profit to them,” prosecutors said.
The Cokers and Patten face steep prison sentences and fines. The securities fraud and securities price manipulation counts carry maximum penalties of 20 years in prison and a $5 million fine.
The wire fraud and money laundering counts also have maximum penalties of 20 years in prison.
