Your deli in your hometown in Paulsboro, NJ
A now-disqualified attorney pleading guilty to federal crimes related to shell company fraud is listed as an attorney in early financial documents for a New Jersey company whose stock valuation rose to $ 100 million or more is, despite only owning a single small delicatessen company.
Former attorney Gregg Jaclin was copied on notices deli owner Hometown International filed with the Securities and Exchange Commission in 2015 and 2016.
This includes the very first document Hometown filed with the SEC that is publicly available.
In June 2020, Jaclin pleaded guilty to conspiracy and obstruction of justice. Separately, in a related case in 2019, the SEC issued a final verdict against him “for operating a fraudulent shell factory system that put bogus companies public and sold for a profit,” a press release said Year.
The companies involved in this behavior – none of which was Hometown International – were founded in Nevada with the support of Jaclin, who was disfellowshipped in New Jersey for his actions last October.
Records show that Hometown International, while having its only business in southern New Jersey, was itself incorporated in Nevada.
In a 2015 letter to Hometown International, SEC officials wrote, “We believe you are a Shell company.”
Hometown International and its executives have not been accused of wrongdoing by the SEC or any other government agency.
“The pastrami must be incredible”
Hometown International’s stock, traded on the over-the-counter market, fell roughly 33% in the hours after it started trading on Friday morning. The day before, CNBC had published articles about the company’s unusually high market capitalization, which were first mentioned in a letter to clients addressed to hedge fund manager David Einhorn.
“The pastrami must be amazing,” quipped Einhorn in his letter.
Share prices recovered significantly during the day. Hometown’s stock closed at $ 12.99 per share on Friday, down 3.78% from the previous day.
Jaclin, who is still serving his three-year prison sentence for his criminal case, did not immediately respond to a request for comment.
There were also no other people associated with Hometown International, including top executives and the current attorney, and whoever is monitoring the company’s voicemail when CNBC reached out to them.
Paul Morina is the President and CEO of Hometown International, which owns Your Hometown Deli in Paulsboro, New Jersey.
Morina is also the director and head coach of the renowned wrestling team at Paulsboro High School. SEC documents show he holds 1.5 million shares of Hometown, with warrants for 30 million more shares.
The hometown vice president and secretary is Christine Lindenmuth, a math teacher and administrator at the same high school.
Lindenmuth’s home address is listed as the mailing address of Hometown International.
Morina and Lindenmuth’s biographies in the SEC filings do not mention any previous experience of either in the food service industry, a publicly traded company, or the financial industry.
The Hometown deli had sales of only about $ 35,000 for the past two fiscal years. The delicatessen store was closed from mid-March to early September last year due to the Covid-19 pandemic.
Even so, the nearly 8 million common shares recently traded at nearly $ 14 per share, for a market capitalization of over $ 100 million.
A woman who answered the phone at the deli on Friday asked, “Would you like to place an order?”
She then hung up after the caller identified himself as a reporter and said he wanted to speak to someone about Hometown International.
In the SEC filings, Homeland is open about its business prospects.
“Our financial situation raises doubts as to whether we will continue as a company.” the company says in one filing.
The company suggests finding an acquisition target or additional funding to keep operations going.
“Future success depends to a large extent on management’s ability to find and attract a suitable acquisition,” Hometown said in a release last year.
Hometown International’s major shareholders also include companies in Hong Kong and Macau, China, a mecca for wealthy gamblers.
Hometown chairman Peter Coker Jr. is listed as chairman of a Hometown investor who also operated a luxury hotel in Macau known as The 13.
The hotel has a fleet of Rolls-Royce Phantoms that are available as limousines for hotel guests. Online booking sites indicate that the 13 hotel is not currently accepting reservations.
Coker’s father, Peter Coker Sr., is listed on the financial records as another major shareholder in Hometown.
The elder Coker, who lives in North Carolina, is listed on the SEC with 63,334 common shares of Hometown International and has warrants for an additional 1.26 million shares.
The elder Coker was identified in other SEC filings as the founder and director of Tryon Capital Ventures, a North Carolina company. The hometown pays Tryon $ 15,000 a month under a consulting agreement.
“We are assuming that the term of the consulting contract with Tryon will be extended by another year,” says the Hometown annual report.
In 2019, an investor named W. Robert Bizzell sued Peter Coker Sr. and other managing partners of a company called Tryon Capital LLC in the North Carolina Business Court.
The lawsuit related, among other things, to solicitation fraud and constructive fraud related to inducing Bizzell to invest in another Coker Sr. affiliate, SSAC Capital. It also said the Bizzell money would help grow a specialty retail operation during the Chapel Hill-based Southern Season.
Bizzell’s lawsuit stated that the defendants had “deviated” from their stated use of his money, which amounted to hundreds and thousands of dollars, and converted his interest into equity as a debtor.
Coker Sr. and the other defendants denied Bizzell’s allegations.
A filing in August 2020 revealed that Bizzell’s lawsuit was voluntarily dismissed with prejudice, which is normal when civil claims are settled out of court by the parties.
John Marshall, a Bizzell attorney, declined to comment when contacted by CNBC. He said he was bound by a confidentiality clause in the settlement agreement.
Coker Sr. has not returned any requests for comments. An attorney for 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 published an article in nearby Allentown in which American Express Bank alleged in bankruptcy proceedings filed by Peter Coker that he had “fraudulently transferred hundreds of thousands of dollars of his property to thwart their collection efforts to nearly $ 900,000.” . “
In court files, the newspaper said, American Express said Coker was “a solvent debtor who wants to appear insolvent”.