Father and Son Sentenced in Multi-Year Stock Fraud Tied to New Jersey Deli Scheme

The scheme, which artificially inflated stock values of two OTC companies by up to 19,900%, involved control of a Paulsboro deli business and culminated in federal convictions.

NEW JERSEY — A father and son were sentenced on May 13, 2025, for their roles in a years-long securities fraud scheme that manipulated the stock prices of two publicly traded companies, including one connected to a small deli in Paulsboro, New Jersey, federal authorities announced.

Peter Coker Sr., 82, of Chapel Hill, North Carolina, was sentenced to six months in prison, followed by three years of supervised release, which includes six months of home detention, and $500,000 in fines. His son, Peter Coker Jr., 56, formerly residing in Hong Kong, received a 40-month prison sentence, along with three years of supervised release and $250,000 in fines. The sentences were handed down by U.S. District Judge Christine P. O’Hearn following their guilty pleas on December 19, 2024, to charges of securities fraud and conspiracy to commit securities fraud.

James Patten, 65, of Winston-Salem, North Carolina, also pleaded guilty to similar charges and is awaiting sentencing.

Federal prosecutors say the defendants engaged in a scheme from 2014 through September 2022 to manipulate stock prices through coordinated trades that gave the illusion of market demand. The scheme centered on two thinly traded companies: Hometown International Inc. and E-Waste Corp., both listed on the OTC Link Alternative Trading System, a platform used by small-cap stocks with fewer disclosure requirements.

The fraud initially took root in Paulsboro, where two local residents opened a deli under the corporate umbrella of Hometown International. Patten, a long-time acquaintance of one of the deli founders, proposed the creation of the public company ostensibly to house the deli but secretly aimed to use it as a reverse merger vehicle.

Federal documents detail how the trio gained control of both Hometown International and E-Waste Corp., transferring millions of shares to nominee entities and using friends, family members, and associates to disguise ownership. These shares were then used in match and wash trades, where the same parties essentially bought and sold shares between controlled accounts to simulate trading activity.

The manipulated trading drove Hometown International’s stock up by approximately 939% and E-Waste’s stock by around 19,900%, according to federal investigators. These inflated valuations were misleading to the market and intended to maximize potential profits in forthcoming reverse mergers.

The U.S. Attorney’s Office credited a multi-jurisdictional effort by the FBI, including offices in Philadelphia, Charlotte, Los Angeles, San Francisco, Denver, and Knoxville, and agents from IRS Criminal Investigation in Newark, for uncovering the scheme.

Prosecution of the case was led by Deputy Criminal Division Chief Lauren E. Repole and Assistant U.S. Attorney Aaron Webman of the Economic Crimes Unit.

The case underscores the vulnerabilities of small-cap markets and the risks of opaque corporate structures, especially within platforms like the OTC Marketplace, where regulatory oversight is limited compared to major exchanges.