Hometown Deli, Paulsboro, NJ
Mike Calia | CNBC
According to court records, federal authorities attempted to detain one of the men charged with an alleged multi-year fraud involving a convenience store in a small New Jersey town.
The man — Peter Coker Sr., 80 — was arrested Monday in North Carolina and then released after the government agreed to the terms of his release. His son Peter Coker Jr., 53, was also charged. He is based in Hong Kong and remains at large.
Authorities also charged another North Carolina resident, James Patten, 63 on Monday. Both he and Coker Sr. are expected to appear in federal court in New Jersey on a date yet to be determined.
The three men are charged with 12 counts, including securities fraud, wire transfer fraud and money laundering. As of 2014, when plans for the deli was first drawn up, authorities say until this month that the men orchestrated a plan to inflate the value of publicly traded companies called Hometown International and E-Wast as they sought merger partners. The Securities and Exchange Commission has also charged the men in a parallel case.
Hometown International, which only had the deli and had annual sales of less than $40,000, and E-Wast, which had no discernible business, both ended up with a market value of about $100 million. Both companies merged with other companies. The deli’s new owner, Makamer Holdings, closed the store earlier this year and sold the remaining inventory for $700.
Coker Jr. was president of Hometown International, while Coker Sr. was a major shareholder. Patten had business relationships with them. He also wrestled in high school with Paul Morina, the one-time CEO of the deli, high school principal and wrestling coach in Paulsboro, New Jersey, where the sandwich shop was located. Attempts to reach Morina have failed.
After the Cokers and Patten took control of Hometown International, authorities said, they transferred shares to family members, friends and associates — including those in China — in a scheme to make it appear as if the company had more shareholders than it had in China. had reality.
The indictment mentions two co-conspirators in Hong Kong, but does not name them. Neither Manoj Jain, the founder of one of the Hong Kong-based investors, Maso Capital, nor his colleagues had any contact with the investigators, according to a person familiar with the case. This individual, who declined to be named due to the sensitive nature of the case, also claimed that Jain and his colleagues are not the co-conspirators named in the indictment.
History of problems
Coker Sr. and Patten both have checkered legal histories.
Coker Sr. has been charged with allegedly hiding money from creditors and business-related fraud. He denied wrongdoing in those cases, one of which was settled out of court in North Carolina. In 1992, he was arrested in Allentown, Pennsylvania, and charged with prostitution and other crimes after allegedly unmasking himself and introducing three schoolgirls, the local Morning Call newspaper reported at the time.
Patten is barred from acting as a stockbroker by broker-dealer regulator FINRA. He was also the subject of repeated disciplinary action by the regulator. In 2006, he successfully appealed sanctions issued by an SEC judge in a case over allegations of stock manipulation. Patten was defended in that case by attorney Ira Sorkin, who also represented infamous Ponzi mastermind Bernie Madoff.
Attorneys listed for Coker Sr. and Patten declined to comment on the next steps of the case.
The lawyers who assisted the men in their performance on Monday are not expected to continue to work for them. It wasn’t immediately clear who the men would hire next as the case progressed.
– Dan Mangan of CNBC contributed to this report.
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