A Thai police officer questions Peter Coker, Jr. (left) following his arrest
A South Jersey deli with connections to Macau, valued at $100 million, is at the center of a bizarre tale of fraud that prosecutors say has been unfolding for at least seven years, The Star-Ledger has reported.
Peter Coker Jr., the man responsible for a massive international stock manipulation scheme involving the deli, created four foreign shell corporations based in Macau, allegedly to hide his ownership interest and his position as a majority shareholder in the deli.
U.S. prosecutors claim Coker also discussed the need to transfer shares into other companies’ names to avoid appearing too “close.”
Coker, who was extradited from Thailand this month to face charges, is seeking bail, but prosecutors argue he poses a flight risk since he renounced his U.S. citizenship more than a decade ago. At a hearing in Newark, prosecutors informed a federal judge that Coker has minimal ties to the United States and therefore has every reason to flee.
As reported by the local daily, Coker’s attorney has requested he be released on conditions of strict home confinement, GPS location monitoring, and a $1.5 million bond secured by five properties in North Carolina. However, the hearing was put on hold after it was discovered there was a detainer on Coker from U.S. Immigration and Customs Enforcement since he is now a non-citizen.
The federal indictment, which was unsealed in October, charged Coker, along with his father, Peter Coker Sr., 80, of Chapel Hill, North Carolina, and James Patten, 63, of Winston-Salem, North Carolina, with a conspiracy to commit securities fraud using the little-known New Jersey deli as a vehicle. The charges arose from the public filings related to Hometown Deli in Paulsboro in Gloucester County, about nine miles southwest of Philadelphia.
The small sandwich shop reported less than $40,000 in annual revenue from selling cheesesteaks and Italian subs. Yet its parent company, Homestead International, which owned nothing but the deli, was valued at over $100 million, according to public reports.
The charges allege the scheme was not just a “pump-and-dump” operation, a common scam involving false and misleading positive statements that target unsuspecting investors, but rather, a complex instance of fraud geared toward a reverse merger.
In a reverse merger, an existing public “shell company,” which is a public reporting company with few or no operations, acquires a private operating company, usually one that is seeking access to funding in the U.S. capital markets.
Typically, the shareholders of the private operating company exchange their shares for a large majority of the shares of the public company. The private operating company’s shareholders gain a controlling interest in the voting power and outstanding shares of stock of the public shell company.
Prosecutors argue the whole enterprise was not about merely dumping overinflated shares back onto the market, but rather, was designed to facilitate a reverse merger.
According to The Star-Ledger, the story took on added mystery after it was disclosed the deli was owned by Paul Morina, the principal, and a famed wrestling coach at Paulsboro High School, who on paper became the CEO of Homestead International, which bought out the deli. Morina was abruptly forced out in May 2021. The trial continues.PC
