• A former fugitive in the securities fraud case of the notorious $100 million New Jersey deli has been granted bail.
• But Peter Coker Jr. remains in jail as federal prosecutors fight his release by arguing he remains a flight risk.
• Coker Jr., 53, was charged in September with his father, Peter Coker Sr., and another man, James Patten, in a 12-count indictment alleging securities fraud and conspiracy involving Hometown International, the deli owner, and E-Waste, a shell company.

A former fugitive in the securities fraud case of the notorious $100 million New Jersey deli has been granted bail — but he remains in jail as federal prosecutors fight his release by arguing he remains a serious flight risk.

It is not clear that the defendant, Peter Coker Jr., will be set free on the $1.5 million bond set by a judge last week, even if prosecutors lose their pending challenge of the bail ruling, which is due to be argued at an April 17 hearing.

Coker Jr., who renounced his American citizenship four years ago, is the subject of a U.S. immigration detainer that could keep the one-time Hong Kong businessman locked up until his criminal case is resolved by trial or a plea deal.

He appeared via Zoom for a brief virtual court hearing from Essex County, New Jersey, jail on Wednesday, along with his lawyer and his two co-defendants and their attorneys.

Clad in a yellow jailhouse outfit, Coker Jr. listened as a prosecutor and defense lawyers informed New Jersey federal Judge Christine O'Hearn about the status of efforts to "narrow the issues" in the case, as one lawyer put it. O'Hearn scheduled the next hearing for late May.

Coker Jr., 53, was charged in September along with his father, Peter Coker Sr., and another man, James Patten, in a 12-count indictment alleging securities fraud and conspiracy.

Prosecutors allege that the trio, starting in 2014, conspired to enrich themselves through a scheme to fraudulently manipulate the stock prices of two companies, Hometown International and E-Waste, through a series of coordinated trades.

Hometown at the time owned only one small, money-losing deli shop in Paulsboro, N.J., while E-Waste was a shell company with no actual business operation.

Despite their utter lack of meaningful revenue, both companies' stock prices soared during the time they were effectively controlled by the Cokers and Patten, prosecutors allege, to the point where the firms' market capitalizations exceeded $100 million apiece.

Prosecutors say the scheme was designed to make both companies attractive targets for so-called reverse mergers with private companies. Prosecutors also allege the scheme netted consulting firms controlled by the Cokers more than $800,000.

The elder Coker and Patten were arrested at the time of the indictment in North Carolina, where they reside. They were released on bonds of $100,000 apiece.

But Coker Jr. remained at large until his arrest in January in a resort area of Phuket, Thailand, where he had been living and getting treatment for a liver ailment. He was extradited to the United States on March 15, and has been held in jail since then.

In a March 27 letter to U.S. Magistrate Judge Cathy Waldor, Coker Jr.'s lawyer John Azzarello wrote there was no evidence that he intended to flee, or that his proposed bail package was inadequate to mitigate the risk he would flee.

Azzarello wrote that Coker Jr. lived openly in Thailand under his real name, and immediately waived extradition when arrested. The defense lawyer said Coker Jr.'s potential criminal sentence is much less than what prosecutors argue it could be because "there was no actual loss to any identifiable victim in this case."

If he pleaded guilty, Coker Jr. would face a sentence of probation, and at most 12 to 18 months in prison if convicted at trial, Azzarello wrote.

"The government's indictment does not identify a single victim that has lost any money
due to Mr. Coker's alleged conduct," Azzarello wrote. "The government's indictment, in sum, describes an
attempted fraud, rather than a completed fraud."

The defense lawyer also said that the consulting fees paid by the two companies came from money that was placed into the firms by either the Cokers or others "who were aware of the fraud and were seeking to profit from the fraud."

"Any money taken out of either company, therefore, cannot be categorized as loss to any victim as that money originated with the participants in the fraud," Azzarello wrote.

On March 29, Waldor granted Coker Jr.'s request for bail, overruling an argument by assistant U.S. attorney Shawn Barnes that he "posed a serious risk of flight."

Waldor set Coker Jr.'s release bond at $1.5 million, to be secured by equity in five properties owned by his parents and his sister.

Waldor said that Coker Jr. could be released into the custody of his mother, Susan Coker. He would be subject to home incarceration at her and Coker Sr.'s Chapel Hill residence with electronic monitoring, barred from using the internet and forced to surrender all passports and travel documents.

But Waldor stayed the release order to give prosecutors the opportunity to challenge it with the district court judge who is handling the case.

On Monday, Barnes filed a brief arguing that Waldor's decision should be revoked.

Barnes reiterated that Coker Jr. had given up his U.S. citizenship and that he has "extensive" links to foreign countries, as well as "access to large amounts of money, and minimal ties to the United States."

The prosecutor noted that Coker Jr. has citizenship in St. Kitts, a Caribbean nation where he potentially has assets. He also stressed that Coker Jr. has $3 million in a foreign checking account in Hong Kong, as well property in Panama that is valued at $500,000.

"While $1.5 million, the approximate value of the collateral, sounds like a lot of money for an individual to put up for bail – it is a drop in the bucket for this defendant," Barnes said.

Barnes also wrote that Coker Jr. had allowed his co-defendant Patten "to use a brokerage account in [Coker Jr.'s] sister's name to commit match and wash trades" that were part of the alleged fraud scheme.

"Indeed Coker, Jr.'s sister" — the same one whose property would partially secure his release bond — "is referred to as 'Individual-5' in the Indictment," Barnes wrote.

Coker Jr. also allowed Patten to use brokerage accounts in the names of Coker Jr.'s nephew and niece as part of the scheme, the prosecutor said.

Barnes said those facts show that Coker Jr. "put his family members in the middle of a significant large-scale fraud because it benefitted him personally."

"Simply stated, the Defendant's assertions that he would not flee because it would jeopardize his family members' homes is unsupported by the record; in fact, it is actually refuted," Barnes wrote.

"This Defendant does what is good for him, even if it means using a family member's account to commit crimes or letting an elderly parent, who is far less culpable than the Defendant, answer for the lion's share of their joint criminal activity," the prosecutor said.

Barnes also argued that Coker Jr. stood to make tens of millions of dollars from a reverse merger of the deli company, but that windfall was thwarted because of negative news articles that exposed the fraud.

CNBC in 2021 published more than 20 articles detailing questions about the backgrounds of Coker Sr. and Patten, and others connected to Hometown International and E-Waste.