Father-and-son fraudsters behind $100M New Jersey deli stock scam sent to prison

The father-and-son fraudsters who pleaded guilty in a $100 million pump-and-dump scheme involving a New Jersey Deli were sentenced to serve jail time on Tuesday

Peter Coker Sr. 82, received a six-month stint and was also ordered to serve six months of home confinement after his release, as well as pay a $500,000 fine and up to $644,000 in restitution.

His 56-year-old son, Peter Coker Jr., was sentenced to 40 months in prison — despite a plea from his lawyer for time served because the former fugitive was allegedly violently beaten in a Thai prison after his arrest.

A third man who pleaded guilty in the brazen plot, James Patten, will be sentenced on June 10.

Their scheme pushed the market capitalizations of both companies above $100 million each – despite Hometown International owning just a small, money-losing deli in New Jersey, and E-Waste having no business operations at all.

The fraud resulted in nearly $5 million in losses, including investments from Duke and Vanderbilt universities.

“What is the motivation here other than greed? Because I don’t see it,” Judge Christine O’Hearn asked in US District Court in Camden, noting that all three defendants were worth millions of dollars each – with Coker Sr.’s net worth estimated at $6 million.

From 2014 to 2022, the three men coordinated trading of the companies’ stocks to make them appear in high demand — pushing Hometown’s stock price more than 900% higher, and that of E-Waste up nearly 20,000%.

Their scheme was exposed in April 2021, when hedge fund manager David Einhorn noted in a letter to clients that Hometown’s deli brought in just $36,000 over the previous two years combined, despite its $100 million valuation.

“The pastrami must be amazing,” Einhorn remarked.

Coker Jr. was extradited from Thailand in March 2023 after spending six months on the run before being nabbed. He also has served more than two years in an Essex County jail in New Jersey while awaiting sentencing.

“This crime has changed me profoundly,” Coker Jr. told O’Hearn while wearing a yellow jailhouse uniform.

“The assault and the horrors I experienced in Bangkok prison, I wouldn’t wish on my worst enemy. It was the lowest point in my life.”

Coker Jr. faces deportation after serving his jail stint because he renounced his US citizenship in 2019. He holds citizenship on the Caribbean island of St. Kitts.

For his aging dad, a former star college basketball player at Dartmouth and then North Carolina State, federal sentencing guidelines had suggested a prison sentence of 51 to 63 months for the aging dad,. Prosecutors said they wanted the top end of a range of zero to 24 months when he pleaded guilty.

“I do stand before you extremely remorseful for my actions,” Coker Sr. told O’Hearn, as his wife, daughter, grandchildren, and friends looked on, according to a CNBC report.

“I’m terribly sorry for my part. This episode has been the worst time of my life,” he added. “I’m sorry for every investor who has been harmed by my actions.”

Coker Sr.’s lawyer, Zach Intrater, painted the Chapel Hill resident as a stand-up family man and asked the judge to spare him from a prison sentence.

He repeatedly referenced Coker Sr.’s 61-year marriage to Susan Coker, asking the judge to let them live out the remainder of their lives together.

“I don’t think they make very many more like Pete anymore,” Intrater said. “He’s courtly, his manners are impeccable.”

“He bears responsibility for engaging in an offense that didn’t just hurt other people, that didn’t just hurt his family, but that involved his son, his only son, and knowing that his son has been incarcerated in part from his own actions and knowing what has [been] happening to his son during that term of incarceration,” Intrater said.

“Judge, I think having to live with that is a punishment that could be worse than even what you could impose.”.

Patten previously pleaded guilty to a mail fraud charge in 2010 over sending a false statement to a client to cover up bad investments he made with her money. He was sentenced to 27 months in prison in that case.

He was also barred by the broker-dealer FINRA from acting as a stockbroker after failing to pay an arbitration award of more than $753,000 and violating securities laws.