The former Chairman of South Shore Holdings Ltd, owner of failed luxury Macau hotel THE 13, has been denied bail by the US federal court following his arrest in Thailand in January for stock market manipulation.
Peter Coker Jr, who stepped down as Chairman of South Shore Holdings in October, had previously been approved for release on a US$1.5 million bond but that decision was last week reversed on appeal after the judge deemed him to be a flight risk, according to US media outlet CNBC.
Prosecutors had argued that Coker be held because he had renounced his US citizenship, had extensive links overseas and held more than US$3 million in assets. It was also noted that the 54-year-old had made no effort to contact authorities before he was arrested in a hotel room in Phuket in January, despite being placed on a red and black notice by Interpol.
Legal sources tell IAG that Coker had lost around 40 pounds while initially being held in a Thai prison and, they assume, chose not to fight extradition in the hope he would make bail in the US.
Coker, his father Peter Coker Sr and another accomplice, James Patten, were charged last September with securities fraud, conspiracy to commit securities fraud and conspiracy to manipulate securities prices, while Patten was also charged with four counts of manipulation of securities, four counts of wire fraud and one count of money laundering.
Patten and Coker Sr were arrested at the time but Coker Jr, who had been residing in Hong Kong, remained at large until being tracked down following a joint investigation by Thailand’s Central Investigation Bureau and the US Federal Bureau of Investigation.
According to information released by the US Attorney’s Office in September, the trio orchestrated a reverse merger of two publicly traded companies – Hometown International Inc. and E-Waste Corp – with two private operating companies, then sold the shares of each entity at a significant profit.
“Once the defendants gained control of Hometown International and E-Waste’s shares, they arranged for the transfer of millions of shares of stock to a number of nominee entities, including entities controlled by Coker Jr, in an effort to mask their control of the shares,” the US Attorney’s Office said.
“In addition, the defendants transferred shares to family members, friends, and associates and gained control over their trading accounts by obtaining their log-in information in order to conceal the defendants’ involvement. The defendants then used those accounts to commit a number of coordinated trading events, often referred to as match and wash trades, to trade in Hometown International and E-Waste Corp.’s stock on both sides of the transaction.
“These tactics artificially inflated the price of Hometown International and E-Waste’s stock by giving the false impression that there was a genuine market interest in the stock. Their scheme had the ultimate impact of artificially inflating Hometown International’s stock by approximately 939% and E-Waste’s stock by approximately 19,900%.”
It was reported at the time that Hometown’s stock holding had soared to 8 million shares at a price of around US$13 per share – despite its only asset being a New Jersey deli with only US$35,000 in sales in the past two years combined.
Coker now faces up to 45 years in jail and more than US$10 million in fines if convicted.
Trading in South Shore shares were themselves suspended in July 2021, shortly after the company applied to the Macau court for voluntary liquidation of its wholly-owned subsidiary New Concordia Hotel Limited, the sole beneficial owner of THE 13 Hotel. The company was delisted from the Hong Kong Stock Exchange in February of this year.
South Shore had been facing pressure from its lenders at the time to repay mounting debts, including a statutory demand issued by one lender demanding payment of HK$3.28 billion (US$423 million) in outstanding loans and interest or face a winding up petition against the company.
In October 2021, South Shore revealed that all of its subsidiaries had ceased operations and were insolvent as it awaited a decision on the possible winding up of the company.
The demise of South Shore ultimately emanated from the failure to realize its vision for THE 13 Hotel, located to the south of Macau’s Cotai Strip.
The brainchild of long-departed Chairman Stephen Hung, THE 13 had been envisioned as an uber-luxury hotel with space for 66 VIP gaming tables aimed at capitalizing on Macau’s booming VIP segment of the early 2010s. Instead, a series of funding and construction delays saw the property open in September 2018 with no gaming and with a number of rooms unfinished – all at a cost of US$1.6 billion.
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