Stewart Finance Defendant Charged with Contempt of Court

A U.S. District Court judge has ordered John Ben Stewart, Jr. and his son, William Joseph Stewart, to pay $200,000, or face jail time, for violating the court's asset freeze order.

In a complaint filed on September 4, 2003, the FTC charged Stewart Finance, its affiliates, and John Ben Stewart, Jr. with violating federal lending laws by deceptively selling extra products, such as insurance and car club memberships, with personal consumer loans, and deceiving consumers about the cost of using Stewart Finance's direct deposit program. The FTC asked the court to bar the illegal practices and order redress for consumers. After a hearing in September 2003, the court ordered a temporary halt to the illegal lending practices and a freeze of John Ben Stewart, Jr.'s assets to preserve them for possible consumer redress, pending trial.

In its motion for contempt, the FTC charged that shortly after entry of the court's order, John Ben Stewart, Jr. liquidated certificates of deposit and a life insurance policy, and sold property on Hilton Head Island, South Carolina, in violation of the asset freeze. Stewart argued that he did not violate the asset freeze because the property was held in a trust managed by his two sons, and the trust sold the property. Judge Jack T. Camp disagreed, and held him in contempt. In addition, the court found Stewart's son, William Joseph Stewart, in contempt for aiding and abetting his father in violating the court's order by executing the closing documents for the property sale.

An additional hearing on the matter will be held May 10, 2004.

Before its liquidation in bankruptcy, Stewart Finance operated through nine related companies and 60 branch offices in Georgia, Louisiana, Missouri, Illinois, and Tennessee.

Copies of the court documents related to this case are available from the FTC's Web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1 877-382-4357), or use the complaint form at http://www.ftc.gov.The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

(Civil Action No. 103CV2648 )