New Jersey deli scammer won’t pay millions of dollars in damages

It’s one of those big deli bills you can skip paying.

A federal judge is hotter than a pot of freshly brewed coffee over the failure of Peter Coker Sr. and his son, Peter Coker Jr., to pay millions of dollars in damages for their roles in the infamous $100 million New Jersey deli stock scam.

Convict Coker owes a total of $5.56 million to victims of a fraud scheme in which he illegally inflated the stock prices of two publicly traded companies to make them more attractive candidates for a merger.

The plan gave one company, then known as Hometown International, a market capitalization of more than $100 million, even though it owned only one small, loss-making delicatessen in Paulsboro, a struggling south Jersey town.

Stock in another company, then known as E-Waste, was at one time worth even more on paper, even though it didn’t hold as many assets.

In a scathing order for the Coker family on Monday, Judge Christine O’Hearn said: “None of the defendants appear to have complied with the court-set deadlines for restitution, despite having substantial liquid assets at the time of sentencing.”

“It appears to the court that the defendants intentionally failed to pay, perhaps to avoid payment or to avoid the loss or transfer of assets,” O’Hearn wrote in the U.S. District Court for New Jersey.

According to O’Hearn’s August order, Peter Coker Sr. of Chapel Hill, North Carolina, must pay the first $2.5 million in restitution within 30 days starting Aug. 11.

Coker Jr., a businessman who previously lived in Hong Kong, was obligated to repay the first installment of $1.5 million within 30 days from that date.

The Cokers and the third defendant in the case, James Patten, are jointly liable for a total of $5.56 million. Patten has not yet been sentenced. Therefore, he does not have to start paying compensation now.

Individual investors are owed a total of $178,849. And the investment arms of Duke University and Vanderbilt University are liable for $3.1 million and $2.3 million, respectively.

In Monday’s order, O’Hearn asked prosecutors and lawyers for the Coker family to respond within two weeks to questions about past unpaid restitution.

The judge ordered them to “immediately take all necessary steps to secure payment of the previously ordered compensation.”

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 in the United States.

Coker Jr. renounced his U.S. citizenship several years ago.

On October 16, the day after his release, he was deported to St. Kitts and Nevis in the Caribbean, where he holds citizenship, according to a letter from O’Hearn’s attorney.

His father, Peter Coker Sr., 83, was released from a prison in Butner, North Carolina, on Tuesday and is scheduled to be released Dec. 8 from a residential reentry facility in North Carolina managed by the U.S. Bureau of Prisons.

In a letter to O’Hearn last week, Coker Sr.’s attorney, Zach Intrater, disputed the idea that he was owed restitution while still behind bars.

Mr. Intrater did not respond to a request for comment from CNBC, but in his letter he said “Mr. Coker Sr. does not intend to avoid liability under the amended judgment” and “intends to begin making the necessary restitution payments.”

The attorney said Coker Sr. understood the restitution order and would pay at least $1,000 on Dec. 17.

“If this is a misinterpretation of the court’s revised judgment, the onus lies with the undersigned attorney, not with my client,” Intrater wrote.

In a sharp footnote to Monday’s order, Mr. O’Hearn rejected Mr. Intrater’s interpretation of the restitution order.

“The court cannot understand counsel’s interpretation of the order,” O’Hearn wrote.

“Beyond the express terms, it was clear that such money should be paid immediately. In fact, there had been prior discussions and proposals by lawyers, but the amount was much lower and in subsequent installments, but the court refused to accept it.”

Messrs. Cokers pleaded guilty before Mr. O’Hearn in December to securities fraud and conspiracy to commit securities fraud.

In May, O’Hearn sentenced Old Coker to six months in prison and Coker Jr. to 40 months.

The younger Coker was released last month on credit for more than two years spent in a New Jersey prison pending sentencing.

Coker Jr.’s attorney, John Azzarello, said in a letter to the judge Thursday that Coker Jr.’s defense has ended with the verdict, that he has had no contact with the fraudster since the sentencing and that “Mr. Coker Jr.’s current whereabouts are unknown.”

“Mr. Coker Jr. also has unpaid invoices for legal services rendered, which remain unpaid to this day,” Azzarello wrote.

Azzarello did not respond to requests for comment.

CNBC also reached out to the New Jersey federal prosecutor’s office, which prosecuted Coker and Patten, for comment.