Case 1:22-cv-05703-CPO-SAK Document 1 Filed 09/26/22 Page 1 of 30 PageID: 1
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF NEW JERSEY
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`SECURITIES AND EXCHANGE
`COMMISSION,
`
`Plaintiff,
`
`v.
`
`JAMES T. PATTEN, PETER L. COKER, SR.,
`AND PETER L. COKER, JR.,
`
`Defendants.
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`COMPLAINT
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`Civil Action No. 22-CV-5703
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`JURY TRIAL DEMANDED
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`Plaintiff Securities and Exchange Commission (the “SEC” or “Commission”), 1617 JFK
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`Boulevard, Suite 520, Philadelphia, Pennsylvania 19103, files this Complaint against the
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`following three Defendants:
`
`1.
`
`2.
`
`3.
`
`James T. Patten
`219 Lucerne Ln.
`Winston Salem, NC 27104
`
`Peter L. Coker, Sr.
`12804 Morehead
`Chapel Hill, NC 27517
`
`Peter L. Coker, Jr.
`Pacific Place Apartments, Suite 3009
`88 Queensway Central
`Hong Kong (SAR)
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`

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`Case 1:22-cv-05703-CPO-SAK Document 1 Filed 09/26/22 Page 2 of 30 PageID: 2
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`The SEC alleges as follows:
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`SUMMARY OF THE ACTION
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`4.
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`Defendants James T. Patten (“Patten”), Peter L. Coker, Sr. (“Coker Sr.”), and
`
`
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`Peter L. Coker, Jr. (“Coker Jr.”) (collectively, “Defendants”) perpetrated two fraudulent
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`manipulative trading schemes.
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`5.
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`Defendants took control of the issued and outstanding shares of two companies:
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`Makamer Holdings, Inc. (f/k/a Hometown International, Inc.) (“Hometown International”), an
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`entity that had operations consisting only of a single deli in southern New Jersey, and EZRaider
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`Co. (f/k/a E-Waste Corporation) (“E-Waste Corp.”), a shell company that had no substantive
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`operations. Defendants artificially inflated the price of these companies’ stock through
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`manipulative trading that Defendants executed through affiliated and nominee accounts they
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`controlled, often using the same IP addresses to execute the trades. In so doing, Defendants
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`artificially raised the price and trading volume of the entities’ common stock, creating the false
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`appearance of active trading and a rising price for the security.
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`6.
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`Via their scheme, Defendants artificially inflated the price of common stock of
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`Hometown International to more than $13.00 per share, which produced a market capitalization
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`of approximately $100 million for a single-store deli with less than $40,000 in annual revenue.
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`7.
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` At around the same time, Defendants artificially inflated the price of E-Waste
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`Corp. common stock from $0.10 to $10.00 per share, which resulted in a market capitalization of
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`approximately $120 million for a shell company with no revenue.
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`8.
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`Defendants have profited from their scheme via selling and holding the stock of
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`Hometown International and E-Waste Corp. at artificially inflated values and by causing the
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`companies to transfer funds to them, directly or through purported “consulting” agreements.
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`9.
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`In addition, Defendants have injured innocent investors who purchased the stock
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`of Hometown International and E-Waste Corp. at artificially inflated prices.
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`10.
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`By engaging in the conduct described in this Complaint, Patten, Coker Sr., and
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`Coker Jr. violated, and unless enjoined will continue to violate, Sections 17(a)(1) and (3) of the
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`Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)(1) and (3)] and Section 10(b) of
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`the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)] and Rules 10b-5(a)
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`and (c) thereunder [17 C.F.R. § 240.10b-5(a) and (c)]. In addition, Patten is liable for violating
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`Section 9(a)(1) of the Exchange Act [15 U.S.C. § 78i(a)(1)], and Coker Sr. and Coker Jr. are
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`liable for aiding and abetting Patten’s violations of Section 9(a)(1) of the Exchange Act [15
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`U.S.C. § 78t(e)].
`
`JURISDICTION AND VENUE
`
`11.
`
`The Commission brings this action pursuant to Sections 20(b) and 20(d) of the
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`Securities Act [15 U.S.C. § 77t(b) and (d)] and Sections 20(e) and 21(d) of the Exchange Act [15
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`U.S.C. §§ 78t(e), 78u(d)] to enjoin such acts, practices, and courses of business, and to obtain
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`disgorgement, prejudgment interest, and civil money penalties. The Commission also seeks a
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`judgment prohibiting Defendants from participating in an offering of any penny stock pursuant
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`to Section 20(g) of the Securities Act [15 U.S.C. § 77t(g)] and Section 21(d)(6) of the Exchange
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`Act [15 U.S.C. § 78u(d)(6)]. The Commission also seeks any other and further relief the Court
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`may deem just and appropriate.
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`12.
`
`The Court has jurisdiction pursuant to Sections 20(d) and 22(a) of the Securities
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`Act [15 U.S.C. §§ 77t(d) and 77v(a)] and Sections 21(d) and 27 of the Exchange Act [15 U.S.C.
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`§§ 78u(d) and 78aa]. Defendants, directly or indirectly, made use of the mails, or the means and
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`instrumentalities of interstate commerce, or the facility of national security exchanges, in
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`Case 1:22-cv-05703-CPO-SAK Document 1 Filed 09/26/22 Page 4 of 30 PageID: 4
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`connection with the transactions, acts, practices, and courses of business alleged in this
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`Complaint.
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`13.
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`Venue is proper pursuant to Section 27 of the Exchange Act [15 U.S.C. § 78aa],
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`because certain of the acts, practices, and courses of business constituting the alleged violations
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`occurred within the District of New Jersey.
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`DEFENDANTS
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`14.
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`James T. Patten (previously defined as “Patten”), age 63, resides in Winston
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`Salem, North Carolina. Patten is employed by Tryon Capital LLC, which is controlled by Coker
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`Sr. and another individual (“Individual 1”). Patten also controls Benchmark Capital LLC and is
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`Vice President of Global Equity Limited. In 2006, FINRA barred Patten from associating with
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`any member firm. Prior to that time, Patten was associated with several broker-dealers and was
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`the subject of repeated disciplinary actions by FINRA.
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`15.
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`Peter L. Coker Sr. (previously defined as “Coker Sr.”), age 80, is a resident of
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`Chapel Hill, North Carolina. Along with Individual 1, Coker Sr. controls Tryon Capital LLC
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`and Europa Capital Investments LLC. From 1999 to 2003, Coker Sr. was a registered broker.
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`16.
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`Peter L. Coker Jr. (previously defined as “Coker Jr.”), age 53, is a resident of
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`Hong Kong. Coker Jr. is the son of Coker Sr. and is the former Chief Executive Officer and
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`Chairman of the Board of Hometown International. Coker Jr. served as Chairman of the Board
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`of Hometown International from February 2020 through April 2022 and as Chief Executive
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`Officer of the company from May 2021 through April 2022. Coker Jr. has served on the board
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`of other private and public companies located in Hong Kong and New Zealand. Coker Jr.
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`controls a number of Hong Kong and U.S.-based nominee entities, which defendants used to
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`perpetrate the schemes alleged in this case, including Global Equity Limited, IPC-Trading
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`Company, RTO Limited, and VCH Limited. Coker Jr. was previously registered as a broker.
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`RELATED ENTITIES AND INDIVIDUAL
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`17. Makamer Holdings, Inc. (f/k/a Hometown International, Inc.) (previously
`
`defined as “Hometown International”) is incorporated in Nevada with a current principal place
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`of business in Los Angeles, California. The company’s shares are quoted on OTC Link, whose
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`parent company is OTC Markets Group, Inc., under the trading symbol HWIN. Hometown
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`International voluntarily files quarterly and annual reports with the SEC. In April 2022, the
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`company completed its acquisition of a private Delaware corporation and changed its name with
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`the State of Nevada from Hometown International, Inc. to Makamer Holdings, Inc. At the same
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`time, Coker Jr. was replaced as Chief Executive Officer by Makamer Holdings’ President.
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`Makamer Holdings purports to develop and market biodegradable resins. The single deli that
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`comprised Hometown International’s operations was located in New Jersey. In addition, from
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`the time Hometown International was formed until May 2021, the President and Vice President
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`of Hometown International were individuals who resided in New Jersey. Patten communicated
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`with these individuals regarding Hometown International while they were in New Jersey. In
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`addition, Patten communicated with at least one nominee account holder residing in New Jersey
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`whose brokerage account Patten used to engage in manipulative trading in connection with the
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`schemes alleged herein.
`
`18.
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`EZRaider Co. (f/k/a E-Waste Corporation) (previously defined as “E-Waste
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`Corp.”) is incorporated in Nevada with a current principal place of business in Kent,
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`Washington. The company’s shares are quoted on OTC Link under the trading symbol EZRG.
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`E-Waste Corp. voluntarily files quarterly and annual reports with the SEC. In September 2021,
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`E-Waste Corp. merged with EZRaider Global, Inc., a private Nevada corporation that purports to
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`import and distribute electric-powered vehicles, and changed its name to EZRaider Co. As of
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`the date of the merger, EZRaider’s founder was appointed Chief Executive Officer of the
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`company. In October 2021, the company changed its trading symbol from EWST to EZRG.
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`19.
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`Individual 1 is a resident of Greensboro, North Carolina. Along with Coker Sr.,
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`Individual 1 controls the entities Tryon Capital LLC and Europa Capital Investments LLC.
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`20.
`
`Tyron Capital LLC (f/k/a Tryon Capital Ventures, LLC) (“Tyron Capital”)
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`is incorporated in North Carolina with a principal place of business in Carrboro, North
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`Carolina. It is owned and controlled by Coker Sr. and Individual 1. Patten is an employee of
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`Tyron Capital. Tryon Capital was engaged as an alleged consultant to both Hometown
`
`International and E-Waste Corp.
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`21.
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`Europa Capital Investments LLC (“Europa Capital”) is incorporated in North
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`Carolina with a principal place of business in Chapel Hill, North Carolina. It is owned and
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`controlled by Coker Sr. and Individual 1.
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`22. Global Equity Limited (“Global Equity”) is incorporated in North Carolina
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`with a principal place of business in Chapel Hill, North Carolina. It is owned and controlled by
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`Coker Jr., and Patten serves as Vice President of the entity.
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`23.
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`IPC-Trading Company (“IPC-Trading”) is an entity located in Macau,
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`China. It is a nominee entity controlled by Coker Jr.
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`24.
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`RTO Limited (“RTO”) is an entity located in Macau, China. It is a nominee
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`entity controlled by Coker Jr.
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`6
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`25.
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`VCH Limited (“VCH”) is a company formed under the laws of Macau,
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`China. It is a nominee entity controlled by Coker Jr. VCH was engaged as an alleged consultant
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`to Hometown International.
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`26.
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`Benchmark Capital LLC (“Benchmark Capital”) is incorporated in New
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`Jersey with a principal place of business in Winston Salem, North Carolina. It is owned and
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`controlled by Patten. Benchmark Capital was engaged as an alleged consultant to E-Waste Corp.
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`TERMS USED IN THIS COMPLAINT
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`27.
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`28.
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`Common stock is a form of equity ownership in a corporation.
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`A “matched trade” is an order to buy or sell securities that is entered with
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`knowledge that a matching order on the opposite side of the transaction has been or will be
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`entered for the purpose of (1) creating a false or misleading appearance of active trading in any
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`publicly traded security; or (2) creating a false or misleading appearance with respect to the
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`market for any such security.
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`29.
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`A “wash trade” is an order to buy or sell securities resulting in no change of
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`beneficial ownership for the purpose of (1) creating a false or misleading appearance of active
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`trading in any publicly traded security; or (2) creating false or misleading appearance with
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`respect to the market for any such security.
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`30.
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`“OTC Link LLC” (“OTC Link”) is owned by OTC Markets Group Inc. OTC
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`Link is an electronic inter-dealer quotation system that displays quotes in three tiers from broker-
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`dealers for over-the-counter (“OTC”) securities.
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`31.
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`The “OTC Pink Open Market” (“OTC Pink Market”) is the lowest tier
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`marketplace for the trading of OTC securities. The OTC Pink Market has no financial or
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`disclosure requirements. The issuers quoted on the OTC Pink Market tend to be small
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`companies with volatile, thinly traded stocks.
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`32.
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`The “OTCQB” is the middle tier marketplace for the trading of OTC securities
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`and consists mainly of early-stage and developing U.S. and international companies. Issuers
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`quoted on the OTCQB must be current in their reporting, undergo an annual management
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`verification, have a minimum bid of $0.01, not be in bankruptcy, have at least 50 beneficial
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`shareholders each owning at least 100 shares, and have an amount of publicly tradeable shares of
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`stock in excess of 10% of the total shares of stock outstanding.
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`33.
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` “Form S-1” is the registration statement under the Securities Act of 1933 that
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`domestic issuers file with the Securities and Exchange Commission in order to publicly offer
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`new securities.
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`34.
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`“IP address” means internet protocol address, which is a unique numerical label
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`that identifies an electronic device on the internet or local computer network.
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`FACTS
`
`I.
`
`DEFENDANTS PERPETRATED A FRAUDULENT SCHEME REGARDING
`HOMETOWN INTERNATIONAL SECURITIES
`
`A. Defendants Used Hometown International as a Vehicle to Perpetrate Their
`Fraud
`
`35.
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`From 2014 through the present, Defendants have engaged in a long-running
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`fraudulent scheme to take control of the outstanding shares of Hometown International;
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`artificially inflate the value of those shares through matched and wash trades in which
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`Defendants, their nominees, and/or affiliates controlled both sides of the trade; and eventually
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`profit from their control of the company and inflated value of the shares of Hometown
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`International stock.
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`8
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`36.
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`In approximately 2014, Patten assisted his childhood friend (“Individual 2”) and
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`Individual 2’s girlfriend (“Individual 3”), both New Jersey residents, in opening a deli in
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`Paulsboro, New Jersey. The entity was incorporated as Hometown International in May 2014,
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`and the single-store deli opened more than a year later, on October 14, 2015, as a wholly-owned
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`subsidiary of Hometown International, operating under the name Your Hometown Deli.
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`37.
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`After Hometown International was incorporated, but before the deli opened for
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`business, between July 2014 and June 2015, Patten and Coker Sr. orchestrated the sale of
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`Hometown International shares of common stock to a number of individuals related to or
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`associated with Patten, Coker Sr. and Individual 1.
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`38.
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`At the time Hometown International was formed and throughout the conduct
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`described in this Complaint, Individuals 2 and 3 were employed at a New Jersey high school.
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`Although Individuals 2 and 3 held the titles of President and Vice President of Hometown
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`International, they were responsible only for running the day-to-day business of the deli.
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`39.
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`At the direction of Patten and Coker Sr., Hometown International took the
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`necessary steps to become a public company. Individuals 2 and 3 were only minimally involved
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`in the plan to make Hometown International a publicly traded company.
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`40.
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`On October 20, 2019, Hometown International stock began trading on the OTC
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`Pink Market.
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`B. Defendants Take Control of Hometown International’s Outstanding Stock and
`Distribute Shares to Various Nominees and Affiliates
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`41.
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`Approximately two months after Hometown International’s shares became
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`publicly traded and were listed on the OTC Pink Market, Defendants began to take control of the
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`outstanding shares of Hometown International. On December 31, 2019, Patten orchestrated the
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`sale of a total of 2 million shares by Individuals 2 and 3, approximately 38% of the outstanding
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`stock of Hometown International, to Coker Jr. for $3,000. Individuals 2 and 3 had each acquired
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`2.5 million shares of Hometown International in May 2014, pursuant to a Membership Interest
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`Purchase Agreement they entered into with the issuer.
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`42.
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`Approximately one month later, on February 1, 2020, Patten orchestrated the
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`granting by Individual 3 to Coker Jr. of an option to purchase Individual 3’s remaining 1.5
`
`million shares, approximately 28% of the outstanding stock of Hometown International.
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`43.
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`Shortly thereafter, in February 2020, Coker Jr. was appointed Chairman of the
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`Board of Hometown International.
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`44.
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`The following month, on March 19, 2020, Coker Jr. exercised the option he had
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`acquired from Individual 3 and purchased 1.5 million shares of Hometown International stock.
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`The purchases by Coker Jr. reflected a steep discount to the market price of Hometown
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`International stock at the time.
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`45.
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`The next day, in an email to his father, Coker Jr. explained that he planned to
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`transfer the shares out of his own name in order to disguise his control over a significant
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`percentage of the outstanding shares of Hometown International.
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`46.
`
` Over the course of the following month, Defendants orchestrated the transfer of
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`all 3.5 million shares of Hometown International that Coker Jr. had acquired from Individuals 2
`
`and 3 to four nominee entities located in Macau, China, which were in fact controlled by Coker
`
`Jr.
`
`47.
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`First, on April 6, 2020, Coker Jr. “sold” 2 million shares of Hometown
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`International stock at a price of $.0015 per share to Global Equity.
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`48.
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`Nine days later, on April 15, 2020, Coker Jr. “sold” the remaining 1.5 million
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`shares of Hometown International stock at the same price of $.0015 per share to the entities
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`10
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`VCH, IPC-Trading, and RTO, all of which were located in Macau, China and controlled by
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`Coker Jr.
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`49.
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`The price at which Coker Jr. “sold” these shares was significantly lower than the
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`market price at the time, which was approximately $4.00 per share.
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`50.
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`In addition to the transfer of these 3.5 million shares to the four entities controlled
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`by Coker Jr., around the same time, Defendants caused the transfer of Hometown International
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`shares of stock to other affiliates. For example, on March 18, 2020, $100,000 of debt owed by
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`Hometown International to Europa Capital, an entity controlled by Coker Sr. and Individual 1,
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`was converted into 100,000 shares of common stock.
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`51.
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`About two months later, on May 20, 2020, Europa Capital used stock obtained
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`through the converted debt to gift blocks of between 100 and 500 shares to 21 individuals,
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`almost all of whom have a known relationship with Patten, Coker Sr., and/or Individual 1.
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`C. The Transfer of Shares to Nominees and Associates Enabled Hometown
`International to Uplist to the OTCQB in Furtherance of the Scheme
`
`52.
`
`Defendants understood that to “uplist” from the OTC Pink Market to the OTCQB,
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`among other things, Hometown International needed to have a minimum of 50 shareholders and
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`more than 10% of its outstanding stock available to be traded publicly.
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`53.
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`The gifting of shares to associates and nominee accounts controlled by the
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`Defendants, orchestrated by Patten and Coker Sr., enabled Hometown International to meet the
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`50 shareholder requirement.
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`54.
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`Shortly after the transfer of shares to affiliates of Patten and Coker Sr. and to
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`Coker Jr.’s nominee entities, on June 8, 2020, Defendants orchestrated the filing of a Form S-1 to
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`register 2.7 million shares of stock, including shares owned by two of Coker Jr.’s nominee
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`entities, Coker Sr., Europa Capital, and at least seventeen individuals related to or associated
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`with Patten, Coker Sr., and/or Coker Jr., so that the shares could be sold on the open market.
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`The registration also enabled Defendants to satisfy the requirement that more than 10% of the
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`company’s stock be available for public trading.
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`55.
`
`The Form S-1 that was filed with the SEC falsely stated that “[n]one of the
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`Selling Shareholders nor any of their respective affiliates have held a position or office, or had
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`any other material relationship, with us or any of our predecessors or affiliates.”
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`56.
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`Defendants caused this statement to be published in the Form S-1 despite their
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`knowledge that the selling shareholders had direct relationships as nominees of Patten, Coker Sr.,
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`Coker Jr., and/or their entities.
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`57.
`
`On October 15, 2020, the registration took effect and the registered shares of
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`Hometown International could be sold publicly.
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`58.
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`The change in listing from the OTC Pink Market to the OTCQB provided more
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`visibility for Hometown International’s securities, fewer obstacles to trading its shares, and
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`enabled the shareholders whose shares were registered in the Form S-1 to sell their shares at a
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`price higher than $6.50, as the Form S-1 Registration Statement capped the sale price at $6.50
`
`per share until the shares were quoted on certain markets, including the OTCQB.
`
`59.
`
`The uplisting also provided a veneer of apparent legitimacy to Hometown
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`International in its quest to attract a corporate partner and enter into a reverse merger.
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`D. Defendants Profited From Their Fraud
`
`1. Defendants Transferred Money to Themselves From Hometown
`International Via Direct Payments and Purported Consulting Agreements
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`At the same time that Patten, Coker Sr., and Coker Jr. endeavored to take control
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`60.
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`of Hometown International’s issued and outstanding shares of stock through associates and
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`nominee individuals and entities, they engaged in several efforts to profit from their control over
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`the company which, as Coker Jr. described in an email to an associate, had been “curated . . .
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`from day 1.”
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`61.
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`Although Individuals 2 and 3 were signatories on Hometown International’s
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`checking account, Patten had access to the account online using usernames and passwords that
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`Individuals 2 and 3 had provided to him. Patten was also able to access the account via hard
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`copy checks, which he could “sign” using a stamp in the name of Individual 3 that Patten
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`possessed.
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`62.
`
`On April 14, 2020, Hometown International and three investors located in Hong
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`Kong consummated a private placement, orchestrated by Defendants, in which Hometown
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`International transferred 2.5 million shares of stock for $2.5 million.
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`63.
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`The proceeds of the sale were transferred to the Hometown International checking
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`account.
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`64.
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`In the weeks following the infusion of $2.5 million into the Hometown
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`International checking account, Patten transferred more than $534,000 out of the account to
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`Coker Sr. and Coker Jr. Specifically, more than $291,000 was transferred to Coker Sr.’s
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`personal account, more than $47,000 to Europa Capital, more than $95,000 to Tryon Capital, and
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`$100,000 to VCH.
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`65.
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`In May 2020, Defendants caused Hometown International to enter into alleged
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`consulting agreements with both Tryon Capital, controlled by Coker Sr. and Individual 1, and
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`VCH, one of Coker Jr.’s nominee entities.
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`66.
`
`Pursuant to these agreements, Hometown International transferred $15,000 per
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`month to Coker Sr. through Tryon Capital, and $25,000 per month to Coker Jr. through VCH.
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`67.
`
`Patten arranged the consulting agreements. In addition, Patten signed Individual
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`2’s name on the Form 8-K announcing the agreements.
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`68.
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`During the period of May 2020 to February 2021, Hometown International
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`transferred $150,000 to Tryon Capital and $600,000 to VCH pursuant to these agreements.
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`69.
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`However, on information and belief, these transfers allowed Defendants to reap
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`ill-gotten gains from the scheme, and any “services” in connection with the purported consulting
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`agreements were unnecessary, not performed, or were in furtherance of the scheme. At the time,
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`the only asset of Hometown International continued to be the lone deli, which had annual
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`revenue of less than $40,000.
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`2. Defendants Profited From Their Manipulation of the Price of Hometown
`International Stock
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`Defendants orchestrated the artificial inflation of Hometown International’s stock
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`70.
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`price through manipulative trading done at their direction or aided by them, engaged in by
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`nominee accounts and in coordination with associates. In October 2019, Hometown
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`International’s stock price was approximately $1.00 per share. Through their fraud, by April
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`2021, Defendants artificially inflated the value of Hometown International’s stock to nearly
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`$14.00 per share, creating a market capitalization of over $100 million for a company with one
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`deli and less than $40,000 in annual revenue.
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`71.
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`Patten took control of the brokerage accounts of friends and relatives of the
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`Defendants, including, among others, accounts in the names of Coker Sr., Coker Sr.’s wife,
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`Coker Sr.’s daughter, and Coker Sr.’s grandson.
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`72.
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`Patten engaged in matched and wash trades using limit orders placed in nominee
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`accounts and accounts controlled by associates of the Defendants in order to artificially inflate
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`the price of Hometown International stock.
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`14
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`Case 1:22-cv-05703-CPO-SAK Document 1 Filed 09/26/22 Page 15 of 30 PageID: 15
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`73.
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`These trades involved no change in the beneficial ownership of the Hometown
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`International stock and/or were placed at substantially similar times, for substantially similar
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`amounts of securities, with Defendants’ nominee accounts or affiliates on both sides of the trade.
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`Many of the trades placed through the various nominee accounts were entered using IP addresses
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`associated with Patten.
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`74.
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`For example, on November 19, 2020 at 9:50 a.m., a sale order was placed in an
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`account in the name of “A.B.,” an associate of Patten. The order was placed from an IP address
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`associated with Patten. The following week, a buy order was placed in the account of “M.M.,”
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`also an associate of Patten, from the same IP address associated with Patten. The wash trade was
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`immediately executed, resulting in an exchange of 200 shares at a price of $10.45 per share
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`between one Patten-controlled account and another Patten-controlled account.
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`75.
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`On February 9, 2021, the account in the name of “A.B” placed an order to buy
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`Hometown International shares at a price of $13.80 per share from an IP address associated with
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`Patten. The following day, an account in the name of “K.P.,” Patten’s sister-in-law, placed an
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`order to sell Hometown International shares at a price of $13.80 per share from the same IP
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`address. The wash trade was immediately executed, resulting in a sale of 100 shares at a price of
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`$13.80 per share between the two accounts controlled by Patten.
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`76.
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`On March 1, 2021 at 12:00 p.m., the “A.B.” brokerage account placed an order to
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`buy Hometown International shares at a price of $13.85 from an IP address associated with
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`Patten. One minute later, an account in the name of “N.P.,” the mother of Patten’s girlfriend,
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`placed an order to sell at a price of $13.85 from the same IP address, resulting in a transfer of
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`100 shares between the Patten-controlled accounts.
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`15
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`Case 1:22-cv-05703-CPO-SAK Document 1 Filed 09/26/22 Page 16 of 30 PageID: 16
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`77.
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`On March 8, 2021, a wash trade of 200 shares of Hometown International was
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`executed at a price of $13.80. At 11:46 a.m., the account in the name of “A.B.” placed a buy
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`order from an IP address associated with Patten. One minute later, a sale order was placed in an
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`account in the name of Europa Capital from the same IP address.
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`78.
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`Coker Jr. arranged for an associate in China, “Individual 4,” to set up a brokerage
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`account that was also used to engage in matched trades with the Patten and Coker Sr.-controlled
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`accounts.
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`79.
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`In a December 15, 2020 email from Coker Jr. to Coker Sr. and Patten, Coker Jr.
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`wrote that his associate, “[Individual 4] my hotel guy[,] should have his account set up to trade
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`HWIN by Thursday latest. I will put you guys in touch with [Individual 4] to get his orders
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`sorted on a daily basis. . . . Let’s try to keep the exposure only at what we need I don’t want to
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`burn him out so orders of 100-200-300 daily is do-able.”
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`80.
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`Almost immediately following this email, Individual 4’s account was used to
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`engage in a matched trade with the “A.B” brokerage account, controlled by Patten.
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`81.
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`On December 17, 2020 at 12:37 p.m., an order to sell 200 shares of Hometown
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`International was placed in the account in the name of “A.B.” The order was placed from an IP
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`address associated with Patten. The next day, at 1:13 p.m., an order to buy 200 shares was
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`placed in the account of Individual 4 from a Hong Kong IP address. The matched trade was
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`immediately executed with 200 shares of Hometown International exchanged between the two
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`accounts at a price of $11.99 per share.
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`82.
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`On January 25, 2021, an order to buy 200 shares of Hometown International at a
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`price of $13.90 per share was placed from the account of Individual 4 from a Hong Kong IP
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`address. Two days later, the “K.P” brokerage account, in the name of Patten’s sister-in-law,
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`16
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`Case 1:22-cv-05703-CPO-SAK Document 1 Filed 09/26/22 Page 17 of 30 PageID: 17
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`placed an order to sell 200 shares at a price of $13.90 per share from an IP address associated
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`with Patten. The matched trade was executed at 9:49 a.m. on January 27, 2021.
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`83.
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`All of these orders were placed at the direction of, or in coordination with, the
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`Defendants. To ensure that the accounts associated with Defendants comprised the majority of
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`the trading volume of Hometown International stock, and to confirm that each account was
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`engaging in manipulative trading in support of the scheme, Patten received weekly reports from
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`the Depository Trust Company which outlined the week’s trading volume at each brokerage
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`account trading in Hometown International stock.
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`84.
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`Patten discussed these reports with Coker Sr. on a weekly basis beginning in early
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`2021. In an email to Coker Sr. dated February 13, 2021, Patten wrote that, “everyone [is]
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`playing nice. All seems to check out.”
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`85.
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`Defendants, their nominees, and affiliates continue to hold securities whose value
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`has been artificially inflated by Defendants’ fraud.
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`86.
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`However, certain individual investors not associated with Defendants also
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`purchased shares of Hometown International at the artificially inflated prices caused by
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`Defendants’ fraud and, thus, have been injured.
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`E.
`87.
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`88.
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`Defendants’ Fraudulent Conduct Remains Ongoing
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`Defendants have continued with their fraudulent scheme.
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`On April 15, 2021, negative news stories began to be published regarding
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`Hometown International’s potentially inflated stock price, questioning why a company such as
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`Hometown International, a single-store deli, had a market capitalization in excess of $100
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`million.
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`89.
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`Despite this negative press, Defendants continued to endeavor to find a company
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`to engage in a reverse merger with Hometown International so that they could change the name,
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`Case 1:22-cv-05703-CPO-SAK Document 1 Filed 09/26/22 Page 18 of 30 PageID: 18
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`ticker symbol, and business operations of the issuer, in order to more easily dump their shares at
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`an artificially inflated price and further profit from their scheme.
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`90.
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`In a January 13, 2021 email between the Defendants, Coker Jr. indicated that the
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`Defendants’ “strategy” was that the “announcement of [a reverse merger] deal” would lead to a
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`“massive” increase in the trading volume of the issuers, which would allow them to more easily
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`dump their shares into the market.
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`91.
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`On May 12, 2021, after Individuals 2 and 3 raised significant concerns with
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`Patten regarding the negative news, Individuals 2 and 3 were removed