Three men charged with fraud in $100 million New Jersey deli scheme - CNBC

Three men were charged with fraud and other crimes in a scheme involving a company that was worth $100 million in the stock market despite having only a small-town New Jersey deli to its name, federal authorities said Monday.

The men – James Patten, 63, of Winston-Salem, North Carolina; Peter Coker Sr., 80, of Chapel Hill, North Carolina; and Peter Coker Jr., 53, of Hong Kong – were charged with 12 counts, including conspiracy to commit securities fraud, securities fraud and conspiracy to manipulate securities prices.

Federal prosecutors said Patten is also charged with four counts of manipulation of securities, four counts of wire fraud, and a count of money laundering.

was chairman of Hometown International, while Coker Sr.

Your Hometown Deli, the business at the center of the probe, was located in Paulsboro, New Jersey, over the Delaware River from Philadelphia.

Prosecutors said Patten convinced the owners of the deli, which was established in 2014, to put it under the control of an umbrella company, called Hometown International.

"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 in a release.

undertook a calculated scheme to gain control of Hometown International's management and its shares from the deli owners," prosecutors said.

The securities fraud and securities price manipulation counts carry maximum penalties of 20 years in prison and a $5 million fine.

The conspiracy to commit securities fraud and conspiracy to manipulate securities prices counts each carry a maximum penalty of five years in prison.