Your Hometown Deli in Paulsboro, N.J.
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That’s one big deli bill to skip out of paying.
A federal judge is hotter than a newly brewed pot of coffee over the failure of Peter Coker Sr. and his son, Peter Coker Jr., to pay millions of dollars in restitution for their leading roles in the notorious $100 million New Jersey deli stock fraud.
The Coker convicts owe a total of $5.56 million to victims of their scam, which involved illegally inflating the stock prices of two publicly traded companies to make them attractive candidates for mergers.
The scheme led to one of the companies, then-known as Hometown International, having a market capitalization of more than $100 million despite owning only one small, money-losing delicatessen in the hardscrabble south Jersey town of Paulsboro.
Shares of the other company, then known as E-Waste, were worth even more on paper at one point despite owning no appreciable assets.
Judge Christine O’Hearn, in a scathing order about the Cokers on Monday, said, “It appears … that, despite having substantial liquid assets at the time the sentence was imposed, neither Defendant has complied with the restitution deadlines set by the Court.”
“It appears to the Court that Defendants have purposefully failed to make payment, perhaps in an effort to avoid doing so and/or dissipating or transferring assets,” O’Hearn wrote in U.S. District Court in New Jersey.
Peter Coker Sr. and his wife Susan Coker at U.S. District Court in Newark, New Jersey, March 15, 2023.
Dan Mangan | CNBC
Peter Coker Sr., who lives in Chapel Hill, North Carolina, owed his first installment of $2.5 million in restitution within 30 days of Aug. 11, according to an order by O’Hearn in August.
Coker Jr., a businessman who previously lived in Hong Kong, owed his first installment of $1.5 million within 30 days of the same date.
The Cokers and a third defendant who pleaded guilty in the case, James Patten, are jointly liable for the $5.56 million in total restitution. Patten has yet to be sentenced; because of that, he is not currently required to start paying restitution.
Retail investors are owed $178,849 in total restitution. And investment arms of Duke and Vanderbilt universities are owed $3.1 million and $2.3 million, respectively, in restitution.
In her Monday order, O’Hearn demanded answers from prosecutors and the Cokers’ lawyers within two weeks on questions related to the failure to pay restitution so far.
The judge told them “to take all necessary steps forthwith to secure payment of the restitution amounts previously ordered.”
One potential hurdle to getting money from Peter Coker Jr. is the fact that the 57-year-old is no longer in prison — or even the United States.
Coker Jr. renounced his U.S. citizenship years ago.
On Oct. 16, a day after his release from prison, he we was deported to the Caribbean nation of St. Kitts and Nevis, where he has citizenship, according to a letter to O’Hearn from his lawyer.
Peter Coker Jr., left, is issued search warrants from police at his villa on the southern resort island of Phuket, Thailand, Jan. 11, 2023.
Crime Suppression Division, Royal Thai Police | AP
His father, Peter Coker Sr., 83, is slated to be released on Dec. 8 from a residential reentry facility in North Carolina maintained by the U.S. Bureau of Prisons, having been released from a prison in Butner, North Carolina, on Tuesday.
Coker Sr.’s lawyer, Zach Intrater, in a letter last week to O’Hearn, disputed the idea that he owed any payments toward restitution while he was still locked up in prison.
Intrater, who did not respond to a request for comment from CNBC, in that letter said that “Mr. Coker, Sr., is not looking to avoid his responsibilities under the amended judgment,” and that he “will begin making the required payments toward restitution.”
The lawyer said Coker Sr. would pay no less than $1,000 on Dec. 17, given his understanding of the restitution order.
“If this is an incorrect reading of the Court’s Amended Judgment, then the fault is with the undersigned counsel, and not with my client,” Intrater wrote.
O’Hearn, in a sharp footnote in her order Monday, rejected Intrater’s reading of the restitution order.
Hometown Deli courtroom sketch
Source: Elizabeth Williams
“The Court cannot comprehend Counsel’s stated interpretation of the Order,” O’Hearn wrote.
“Beyond its express terms, it was clear that such monies were to be paid immediately. Indeed, there had been prior discussions and proposals by counsel as to an immediate up front payment, albeit in a much lesser amount with later installments thereafter, which the Court declined to adopt.”
Both Cokers pleaded guilty before O’Hearn last December to securities fraud and conspiracy to commit securities fraud.
In May, O’Hearn sentenced the elder Coker to six months in jail, and Coker Jr. to 40 months in prison.
The younger Coker was released last month because he received credit for the more than two years he spent locked up in a New Jersey jail before his sentencing.
John Azzarello, a lawyer for Coker Jr., in a letter to the judge on Thursday, said his representation of Coker Jr. ended with his sentencing, that he has no contact with the fraudster since his sentencing, and “we do not know Mr. Coker Jr.’s current whereabouts.”
“Mr. Coker Jr. also has an outstanding invoice for legal services rendered which remains unpaid to date,” Azzarello wrote.
Azzarello did not respond to requests for comment.
CNBC has also requested comment from the U.S. Attorney’s Office for New Jersey, which prosecuted the Cokers and Patten.
