Peter Coker Sr., a businessman from North Carolina, has been sentenced to six months in jail following his guilty plea in a scheme that artificially inflated the stock price of a notable $100 million New Jersey deli corporation and a related shell company.
Along with the prison term, Coker Sr. will face an additional six months of home confinement post-release, is required to pay a $500,000 fine, and must provide up to $644,000 in restitution.
During the sentencing hearing at U.S. District Court in Camden, New Jersey, Coker Sr. expressed deep remorse, stating, “I do stand before you extremely remorseful for my actions.” The emotional moment was witnessed by his wife, daughter, grandchildren, and friends.
“I’m terribly sorry for my part. This episode has been the worst time of my life,” declared the 82-year-old resident of Chapel Hill. He added heartfelt apologies for the investors impacted by his misconduct.
While federal guidelines suggested a prison term between 51 to 63 months, prosecutors sought a lesser sentence, advocating for a range of no more than 24 months—an agreement made during his guilty plea.
Alongside his son, Peter Coker Jr., and another conspirator, James Patten, Coker Sr. engaged in practices to inflate the market values of Hometown International, which owned a single sandwich shop in South Jersey, and E-Waste, a company lacking operational activity. Both entities saw their market capitalizations exceed $100 million.
All three men entered guilty pleas for securities fraud.
Judge Christine O’Hearn underscored the severity of the case, describing it as a fraudulent scheme from its inception. She pointed out the worthlessness of the companies and emphasized the absence of any chance for recovery.
“This was a multi-year, very sophisticated fraudulent scheme,” she noted, highlighting the intricate corporate structure involved and the resultant harm caused.
The judge began the hearing by addressing the defense lawyers, siding with prosecutors who claimed that the scheme resulted in nearly $5 million in losses, including investments from prestigious institutions like Duke and Vanderbilt universities.
At one point in the hearing, O’Hearn questioned the motivations behind the scheme, asking, “What is the motivation here other than greed?” This inquiry followed her observation that the defendants were already wealthy.
Coker Sr. reportedly has a net worth estimated at $6 million.
Coker Jr. is scheduled to be sentenced later in the day, while Patten’s sentencing is set for June 10.
Notably, Coker Jr. was absent during his father’s sentencing due to delays related to his transport from an Essex County jail. He has remained in custody since his extradition from Thailand in March 2023.
Coker Jr. may face deportation after serving his sentence, having renounced his U.S. citizenship in 2019, while holding citizenship in St. Kitts.
Defense attorney Zach Intrater argued against prison time for Coker Sr., characterizing him as a devoted family man who acknowledged his wrongdoing after the charges were brought. Intrater stated, “I don’t think they make very many more like Pete anymore,” emphasizing Coker Sr.’s impeccable manners.
He also referenced Susan Coker, his wife of 61 years, urging the judge to consider allowing the couple to remain together for what time they have left.
“He bears responsibility for engaging in an offense that didn’t just hurt others, that didn’t just hurt his family, but that involved his son,” Intrater elaborated, suggesting that living with this knowledge imposed a punishment greater than any prison sentence.
Amidst tears, Susan Coker described her husband as “just a wonderful guy,” asserting, “I know if he had a second chance, he never would have done any of this.”
Coker Sr. and Patten were initially arrested in September 2022, following the merger of Hometown with a bioplastics company and shortly after E-Waste merged with an electric vehicle firm. Coker Jr., who was previously living in Hong Kong, was arrested months later.
The trio faced indictment more than a year after intelligence revealed a network of dubious relationships between the two companies, as well as the previous legal troubles faced by Coker Sr. and Patten, along with consulting agreements that financially benefitted them.
The fraudulent activities gained attention in April 2021 when hedge fund manager David Einhorn humorously noted the incongruence between Hometown International’s market value and its meager revenues from a single deli.
Intrater mentioned that the case’s prosecution was largely spurred by Einhorn’s letter, which attracted significant media scrutiny.
Running from 2014 to September 2022, the fraud involved coordinated stock trades that generated a misleading perception of demand for shares traded on the OTC Marketplace.
The scheme took shape when Patten proposed forming Hometown as an umbrella corporation to his acquaintance, Paul Morina, a high school principal and wrestling coach. The duo was unaware of the subsequent manipulative practices affecting the deli’s stock.
During the operations, Hometown’s stock price increased by more than 900%, while E-Waste saw a staggering rise of almost 20,000%.
Patten has a prior conviction for mail fraud and has faced multiple legal hurdles regarding securities violations throughout his career.
Coker Sr. has also been previously sued for allegedly concealing assets from creditors and accused of business-related fraud, although he denies all wrongdoing.
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