Attorney linked to deli owner involved in stock scam

A now-suspended attorney who pleaded guilty to federal crimes related to shell company defrauding is listed as an attorney in early financial documents filed by a New Jersey company whose stock valuation has soared to $ 100 million or more, despite the fact that he only has a few, small delicacies.

The former attorney, Gregg Jaclin, was copied on messages filed by Deli owner Hometown International with the Securities and Exchange Commission in 2015 and 2016, the data shows.

They include the very first document filed by Hometown with the SEC that is publicly available.

In June 2020, Jaclin pleaded guilty to criminal charges of conspiracy and obstruction of justice. Separately, in a related case, the SEC issued a final verdict against him in 2019 “for running a fraudulent shell factory plan through which fake companies were disclosed and sold for a profit,” a press release reported that year.

The companies involved in that behavior – none of which were Hometown International – were founded in Nevada with the help of Jaclin, who was suspended in New Jersey last October for his actions.

Records show that Hometown International, although it had its only business in southern New Jersey, was itself incorporated in Nevada.

In a 2015 letter to Hometown International, SEC employees wrote, “We believe you are an empty company.”

Hometown International and its executives have not been charged with wrongdoing by the SEC or other government agencies.

Shares of Hometown International, which are traded in the over-the-counter market, plummeted about 33% in the hours after trading began Friday morning. The day before, CNBC had published articles about the company’s unusually high market capitalization, first noted in a letter sent to clients by hedge fund manager David Einhorn.

“The pastrami must be great,” Einhorn joked in his letter.

Stock prices recovered significantly during the day. Hometown’s stock closed at $ 12.99 a share on Friday, down 3.78% from the previous day.

Jaclin, who is still serving his three-year sentence released under surveillance for his criminal case, did not immediately respond to a request for comment.

Nor had other figures associated with Hometown International, including the company’s top executives and current attorney, and whoever checks the company’s voicemail when CNBC contacted them.

Paul Morina is the President and CEO of Hometown International, which owns the Your Hometown Deli in Paulsboro, New Jersey.

Morina is also the head coach and head coach of Paulsboro High School’s renowned wrestling team. SEC documents show he owns 1.5 million shares in Hometown, with warrants for an additional 30 million shares.

The vice president and hometown secretary is Christine Lindenmuth, a math teacher and administrator at the same high school.

Lindenmuth’s home address is listed as Hometown International’s mailing address.

The biographies of Morina and Lindenmuth in SEC filings do not disclose any previous experience of any of them in the food service industry, publicly traded company, or financial industry.

The hometown deli had sales of just $ 35,000 or so for the past two fiscal years. The sandwich shop was closed from mid-March to early September last year due to the Covid-19 pandemic.

Despite this, nearly 8 million shares of common stock were recently traded at levels of nearly $ 14 per share, giving it a market capitalization of more than $ 100 million.

A woman who answered the phone at the sandwich shop on Friday asked, “Would you like to order something?”

She hung up after the caller identified himself as a reporter and said he wanted to talk to someone about Hometown International.

In SEC filings, Homeland is blunt about its business outlook.

“Our financial situation raises doubts as to whether we will continue our continuity.” the company says in an application.

The company suggests that it must find a target for acquisition or additional financing to maintain the business.

“Future success is highly dependent on management’s ability to find and attract a suitable acquisition,” Hometown said in a filing last year.

Hometown International’s major shareholders also include entities in Hong Kong and Macao, China, a mecca for high net worth gamblers.

The chairman of Hometown, Peter Coker Jr., is listed as the chairman of a Hometown investor who has also run a luxury hotel in Macao known as The 13.

That hotel boasts a fleet of Rolls-Royce Phantoms that are available as limousines to the hotel guests. Online booking sites indicate that The 13 hotel is not currently accepting reservations.

Coker’s father, Peter Coker Sr., is listed in the financial records as another major shareholder in Hometown.

The oldest Coker, who lives in North Carolina, is listed on the SEC filing as the owner of 63,334 common stock in Hometown International, with warrants for an additional 1.26 million shares.

The elder Coker has been identified in other SEC filings as the founder and director of Tryon Capital Ventures, a North Carolina entity. The hometown pays Tryon $ 15,000 a month under an advisory agreement.

“We expect the term of the consulting agreement with Tryon to be extended by one year,” said Hometown’s annual report.

In 2019, an investor named W. Robert Bizzell Peter Coker Sr. and other managing partners of an entity called Tryon Capital LLC in North Carolina Business Court, the data shows.

The lawsuit, among other things, alleged fraud in inducement and constructive fraud in connection with causing Bizzell to invest in another to Coker Sr. linked entity, SSAC Capital. It also said Bizzell’s money was to expand a specialty retail business in Chapel Hill-based Southern Season.

Bizzell’s lawsuit stated that the defendants “deviated from” their stated use of his money, which amounted to hundreds and thousands of dollars, and converted his interest as a debtor into equity.

Coker Sr. and the other defendants denied Bizzell’s allegations.

A filing in August 2020 indicated that the lawsuit was voluntarily dismissed by Bizzell with bias, which is normal when civil suits are settled out of court by the parties.

John Marshall, a Bizzell attorney, declined to comment when he reached out to CNBC. He said he was bound by the terms of a confidentiality clause in the settlement agreement.

Coker Sr. did not return any requests for comment. A lawyer before him did not immediately respond to a request for comment.

Public records show that Coker Sr. lived in Macungie, Pennsylvania.

In 1992, The Morning Call newspaper in nearby Allentown published an article stating that American Express Bank, in a bankruptcy case filed by Peter Coker, claimed that he had “ fraudulently transferred hundreds of thousands of dollars of his assets to fund his nearly $ 900,000 fundraising efforts. to thwart. . “

In court papers, the paper said, American Express had said that Coker is “a solvent debtor who wants to appear insolvent.”