The key investor has a history of legal issues

A key investor in the mysterious $ 100 million company that owns only a small delicacy in New Jersey has a history of legal issues and connections to several people who have criminal convictions or have been sanctioned by regulators.

These include a lawyer, an accounting firm and a former stockbroker who has worked for the company, Hometown International. These are related to shareholder Peter Coker Sr., a 78-year-old North Carolina businessman.

Hong Kong-based Coker’s son, Peter Coker Jr., is the president of Hometown International, whose Hometown Delight in Paulsboro, New Jersey, has had sales of just about $ 35,000 in the past two years.

Despite these weak sales, Hometown International had almost 8 million common shares outstanding. On Monday, the company’s shares rose 0.15% to $ 13.01.

Hometown International, which traded on the over-the-counter market in 2019, catapulted out of obscurity last week after hedge fund manager David Einhorn mentioned his bizarrely high market capitalization in a letter to clients.

“Someone pointed us to Hometown International (HWIN), which owns a single rural deli in New Jersey … HWIN hit a $ 113 million market cap on Feb. 8,” Einhorn wrote in Thursday’s letter. “The biggest shareholder is also the executive director / financial director / treasurer and a principal, who happens to be the high school wrestling coach alongside the delicacies. The pastrami must be amazing.”

Hometown shares typically see a daily trading volume of less than 1,000 shares. Some days he doesn’t see transactions. But on Friday, nearly 43,000 shares changed. Just under 15,000 shares were traded on Monday.

Coker Sr. is one of several key Hometown International shareholders mentioned in Securities and Exchange Commission documents, as are entities in Hong Kong and Macao, China.

Public documents show that the Hong Kong entities are all located on the same floor of the same building there. This is also the case for Macao entities. In Hong Kong, an investor named Manoj Jain of Maso Capital Partners has voting power and exclusive investment in the shares of Homeland International held by each of the three entities, the data show.

Coker Sr. personally owns 63,334 shares of Hometown common shares, with warrants for another 1.26 million shares. Coker Sr.’s own company, Tryon Capital, is paid $ 15,000 a month through a consulting contract with Hometown.

Coker Sr. was himself sued for allegedly hiding money from creditors and for business fraud. He denied the wrongdoing in these cases, one of which has settled out of court in recent years in North Carolina. He did not return repeated requests for comment from CNBC.

His Tryon Capital partner, Peter Reichard, filed a lawsuit in 2011 in a criminal case that led to his conviction for a plan to illegally contribute thousands of dollars to the successful campaign of Bev Perdue, a Democrat who was elected that year as a member of Carolina’s First Female Governor.

The scheme involved the use of a fake consulting contract between Tryon Capital Ventures and a fast-food franchisee who wanted to support Perdue. Coker Sr. was not charged in this case.

Reichard is also a managing member, along with Coker Sr., of an entity called Europa Capital Investments, which holds 90,400 common shares of Hometown International and has mandates for another 1.9 million shares.

A footnote in his hometown’s annual report to the SEC last month says Coker Sr. and Reichard “have a common vote and investment power over the company’s European-owned securities.”

Reichard did not return a call for comment.

Two years before the negotiation in 2011, Reichard found out through a DNA test that his real father was the famous spiritual leader Ram Dass, the author of the bestselling book “Be Here Now”. Dass, who while working in the 1960s as a professor of psychology at Harvard under his then-name Richard Alpert, along with Timothy Leary became a leading researcher in LSD. He later traveled to India, where he became a disciple of a guru.

Coker Sr., meanwhile, was a star basketball player at North Carolina State University after a stellar high school career in Allentown, Pennsylvania, and before starting his business career. At one point, he helped oversee investments in pension funds at Bethlehem Steel in Pennsylvania, according to his online biography.

It has also faced a lot of legal issues over the years, including some beyond business.

In August 1992, Coker Sr., 49, was arrested in Allentown and charged with “prostitution and other crimes after allegedly exposing himself to three girls while driving around Central School,” he reported. at that time The Morning Call.

The newspaper, citing police, reported that Coker Sr. drove up to two sisters, ages 14 and 10, and their 15-year-old cousin as they sat on their porch next to an elementary school and “their -he called the car and tried to propose them. “

Coker Sr. would soon drive the BMW back to the girls, the newspaper said. The 14-year-old told The Morning Call that, in order to stop for a while, she showed her mother, who was on the street, and told her “She will take care of you”.

The girl’s mother then approached the car and tried to remove Coker Sr., removing a piece of hair in the process, the girl and police told the newspaper.

Coker Sr., who was captured shortly afterwards, was also charged with juvenile corruption and impudence in this case, The Morning Call reported in the article, which mentioned Coker’s address at the time, which appears in public records.

Records detailing the outcome of this case were not available to the public.

Malcolm Gross, an Allentown lawyer who previously represented Coker Sr., told CNBC on Monday that he sent the businessman to a well-known Allentown criminal defense lawyer after Coker was arrested for indecent exposure. That lawyer died in the late 1990s.

Allentown police said Monday that a search of their files found no records of Coker’s arrest.

Gross represented Coker Sr. in a lawsuit, where he was sued by American Express Bank for nearly $ 900,000 unpaid.

American Express Bank in 1992 accused Coker Sr. of fraudulently transferring hundreds of thousands of dollars of assets to prevent the collection of money it owed to the bank. He was also accused of applying for bankruptcy in bad faith, given, he said, that he was solvent at the time of filing.

Also in 1992, The Morning Call reported that a corporation that owned Unclaim Freight furniture stores had filed a lawsuit against Coker Sr. and another former corporate officer, who were accused of improperly taking at least $ 1 million. dollars from the firm.

Coker Sr. had been vice president of the company, and his wife, Susan, was also a defendant in the case, where she was allegedly paid nearly $ 43,000 in rent for a barn on their Macungie property. , Pennsylvania.

“I did not do the things that Valley Advisors said, so this resolution is good for all parties,” Coker Sr. said in a press release at the time.

A review of the SEC’s filings and other documents by CNBC later revealed other curious details about Hometown International and the people connected to it.

Gregg Jaclin, a lawyer who no longer had a previous relationship with Hometown International during his early financial filings, was sanctioned by the Securities and Exchange Commission and prosecuted and convicted in federal court for a scam involving shell companies. . This scheme preceded his work in connection with his hometown.

SEC records show that an assistant board director sent an email to Coker Sr. in 2012 with questions about a company called Troy Inc. Jaclin was sent that email.

The letter states: “We note that Peter Coker, the chief executive officer and sole shareholder, is also an executive shareholder and / or significant shareholder of other shell companies that have recently applied for registration on Form 10.”

Jaclin is also sent in a May 2014 email from the SEC to Ramon Tejeda, CEO of TablacaleraYsidron, whose address in Chapel Hill, North Carolina, is the same as the address used by Coker Sr. .

Jaclin, who remains under federal surveillance, did not respond to requests for comment.

The hometown auditors, Liggett & Webb, were censored and fined in August by the Public Company Accounting Supervisory Committee. One of the company’s accountants, James Liggett, was banned from being associated with a registered public accounting firm because of conduct unrelated to his hometown.

Liggett told CNBC “I don’t remember” that he was involved in auditing the recordings in his hometown. He sent questions about the company’s business to his former partner, Derek Webb, who did not respond to messages. The hometown’s annual report, submitted last month, said Liggett & Webb has been the company’s auditor since 2015.

James Patten, whose LinkedIn profile identifies him as a financial analyst at Tryon Capital, Coker Sr., fought in high school with Hometown International CEO Paul Morina.

Patten is prohibited by FINRA, the broker-dealer regulator, from acting as a stockbroker or associating with broker-dealers, according to the regulatory authority’s database.

Patten was the subject of repeated disciplinary action by FINRA, which included non-compliance with an arbitration ruling of more than $ 753,000 for violating securities laws, unauthorized trading and changing a client’s account.

In 2006, he successfully appealed the sanctions imposed by an SEC administrative law judge in a case in which he was accused of manipulating the price of a stock listed on the Nasdaq.

Patten was defended in this regard by Ira Sorkin, the lawyer best known for representing Bernie Madoff, the captain of the Ponzi scheme, who died in prison last week.

Morina, who did not return repeated requests for comment, according to SEC filings, owns 1.5 million shares of Hometown common stock, which on paper is worth more than $ 20 million, given the current price of the stock.

Morina is also the principal of Paulsboro High School and, in addition, is the coach of the school’s famous wrestling team, which is a permanent competitor for state championship titles. His brother, Carmel Morina, is a sheriff in Gloucester County, New Jersey, which includes Paulsboro.

Patten is the signatory of a letter, quoted in SEC documents, detailing the lease of the building to your native Deliul, which is the company’s only business, from Mantua Creek Group. SEC filings indicate that Paul Morina is also involved in the Mantua Creek Group.

The letter was sent to the other executive officer of his hometown, Christine Lindenmuth, who is a math teacher and administrator at Paulsboro High School.

Patten did not respond to a request for comment. Lindenmuth did not return repeated requests for comment.

Public records show that Morina is the owner of the property that appears to be adjacent to the delicacy, along with John Giovannitti, athletic director of Paulsboro Junior and High School, high school principal and chairman of the Borough of Paulsboro council.

Giovannitti did not return a comment request.