A father and son have admitted their role in a scheme to inflate the value of two publicly held companies, one of them the operator of a small Paulsboro deli.Peter Coker Sr., 82, of Chapel Hill, N.C., and Peter Coker, Jr., 56, formerly of Hong Kong, conspired from 2014 through September 2022, to manipulate stock prices of the firms, according to the U.S. Attorney’s Office for New Jersey.They expected to profit by selling the companies — deli operator Hometown International and a California business, E-Waste — ...
A father and son have admitted their role in a scheme to inflate the value of two publicly held companies, one of them the operator of a small Paulsboro deli.
Peter Coker Sr., 82, of Chapel Hill, N.C., and Peter Coker, Jr., 56, formerly of Hong Kong, conspired from 2014 through September 2022, to manipulate stock prices of the firms, according to the U.S. Attorney’s Office for New Jersey.
They expected to profit by selling the companies — deli operator Hometown International and a California business, E-Waste — at inflated values, the federal prosecutor’s office said.
The scheme allegedly boosted stock prices by approximately 939% for Hometown International, which consisted of a deli with annual revenues of about $14,000. Stock in E-Waste soared by 19,900%.
Hometown Deli, a modest sandwich shop in a blue-collar borough, drew wide attention in the spring of 2021 when a hedge fund operator noted its stock was valued at $100 million. Hometown International a short time later issued a statement disavowing that figure.
The original management of the Hometown Deli, a now-defunct eatery along Mantua Avenue, was not aware of the scheme, the U.S. Attorney’s Office said in a statement.
It said the deli’s founder agreed to put the deli under stock ownership in 2014 after being approached by a third man in the scheme, James Patten, 65, of Winston-Salem.
Court records indicate that the deli’s founder was Paul Morina, former principal and current athletic director/wrestling coach at Paulsboro High School.
The conspirators took control of each company’s management and its stock, then traded shares through the accounts of other purported investors, the statement said.
“These tactics artificially inflated the price of Hometown International and E-Waste’s stock by giving the false impression that there was a genuine market interest in the stock,” it said.
The conspirators wanted to sell the companies "at a significant profit" through reverse mergers, the statement said.
A reverse merger allows the buyer, a private firm, to become publicly held. Among other advantages, public ownership allows a firm to raise funds through stock sales.
Hometown International agreed to a reverse merger with a Los Angeles-based plastics firm called Makamer.
The alleged conspirators also profited from business dealings with Hometown International. The elder Coker, for instance, was a principal in a North Carolina firm that for some time drew a monthly consulting fee of $15,000 from Hometown International.
The Cokers pled guilty Friday to securities fraud and conspiracy to commit securities fraud. Patten previously admitted guilt to the same charges.
U.S. District Judge Christine O’Hearn scheduled sentencing dates of April 2 for Coker Jr. and May 13 for Coker Sr.
Jim Walsh is a senior reporter for the Courier-Post, Burlington County Times and The Daily Journal. Email: [email protected].