Hometown Deli Stock Scam: Cokers Plead Guilty to Paulsboro Scheme
A father and son duo, Peter Coker Sr. and Peter Coker Jr., recently confessed to their involvement in a scheme aimed at inflating the value of two publicly traded companies, including a small deli in Paulsboro. According to the U.S. Attorney’s Office for New Jersey, the Cokers conspired from 2014 through September 2022 to manipulate the stock prices of these firms in hopes of profiting from selling them at exaggerated values.
Their alleged scheme saw stock prices for Hometown International, a deli with an annual revenue of around $14,000, jump by a staggering 939%. Similarly, stock in E-Waste, a California-based business, soared by an astronomical 19,900%.
Hometown Deli, located in a blue-collar neighborhood, made headlines in the spring of 2021 when a hedge fund operator noticed its stock was valued at $100 million. However, the deli’s original management was reportedly unaware of the scheme, with the deli’s founder, Paul Morina, agreeing to transfer stock ownership in 2014 after being approached by a third individual in the scheme, James Patten.
The conspirators essentially took control of the management and stock of each company, executing trades through accounts of other supposed investors to create a facade of genuine market interest in the stock. This manipulation was intended to pave the way for selling the companies at a considerable profit through reverse mergers.
In a reverse merger, a private company acquires public status, which offers advantages like the ability to raise funds through stock sales. Hometown International, for instance, engaged in a reverse merger with a plastics firm based in Los Angeles called Makamer, as part of the alleged scheme.
The Cokers and Patten pleaded guilty to securities fraud and conspiracy to commit securities fraud, with sentencing dates set by U.S. District Judge Christine O’Hearn for April 2 and May 13.
This development underscores the importance of vigilance and due diligence when it comes to investing in publicly traded companies, as well as the consequences that can arise from fraudulent activities in the world of finance.
