Fraudster family A man pleaded guilty Thursday to being behind a $100 million stock manipulation scheme involving a New Jersey deli.
Peter Coker Sr., 82, and former fugitive's son Peter Coker Jr., 56, confessed to having helped boost their hometown's stock price. Hometown's only assets for many years were shares in Paulsboro's Your Hometown Deli and Shell Company E. -waste.
Federal prosecutors say the two men are scheduled to be sentenced next spring in U.S. District Court in Camden, New Jersey.
Coker Jr., a former Hong Kong resident, was picked up at a hotel near Surin Beach in Phuket, Thailand, in January last year after living on the streets for nearly six months.
A third person, James Patten, was arrested along with Coker's father in September 2022 after federal authorities accused him of 12 counts of fraud. He pleaded guilty last December.
Coker Jr. and his co-conspirators were able to “artificially” inflate the stock price of Hometown, where his father was a majority shareholder, by 939%, even though the deli's annual revenue was less than $40,000. did.
Prosecutors say E-Waste's stock price also falsely increased by about 19,900%.
The trio used fake trades to give the impression that the stocks of both companies were popular with investors over an eight-year period starting in 2014.
The plan involved a so-called reverse merger between Hometown and a foreign company, which would give the latter access to U.S. capital.
Such transactions allow private companies to go public by merging with companies that are already public, essentially replacing an existing “shell.”
The process has been criticized for allowing companies to avoid the intense scrutiny and disclosure requirements associated with traditional initial public offerings.
OTC Markets Group, the exchange where Hometown International's shares were traded, delisted the company in April 2021, shortly after a letter from prominent short seller David Einhorn surfaced.
In a letter to clients, he pointed to Hometown's huge valuation as an example of regulatory flaws.
“The pastrami must be amazing,” Einhorn wrote. “Small investors caught up in these situations are likely to end up harmed, yet the regulators who are supposed to protect investors are not even there and seem uninterested. is.”
The exchange later added a “buyer beware” warning for stocks that fostered suspicions of suspicious activity.
Later that month, Hometown International's management rejected the company's valuation, according to an SEC filing.
“Management recognizes that there is no basis to support the company's stock price based on revenue or assets,” the company said in a statement on April 30, 2021.
Paul Molina, a local high school principal and well-known wrestling coach in the area, was removed as CEO of the company following a vote by majority shareholders in May 2021.
Peter Coker Sr. had previously been accused of concealing funds from creditors and business-related fraud. He has denied wrongdoing in those cases, one of which was settled out of court in North Carolina.
