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Former owner of Castle Builders indicted

Charges claim former Knox County resident defrauded customers of nearly $500,000
By Stephen Betts | Mar 25, 2021
Malcolm and Elizabeth Stewart

Rockland — The former owner of the defunct Castle Builders contractor company in Union has been indicted by a Knox County grand jury on charges that he stole nearly $500,000 through deception.

Malcolm Stewart, 56, who now resides in Pelzer, South Carolina, was indicted March 25 for two counts of Class B theft by deception.

A judge issued a warrant for Stewart’s arrest and set bail at $50,000 cash.

One of the counts contends Stewart "intentionally created the impression that he had the capacity to complete construction, renovation and repair work" when, in fact, he knew that impression was false.

Fifty-six victims of this alleged scheme were listed in the indictment with the amount of thefts totaling $437,906.

The offenses are alleged to have occurred from April 2018 until September 2019 in Knox, Hancock, Kennebec, Lincoln and Somerset counties.

The other charge alleges Stewart committed theft by deception by telling a couple he could not complete work on their project without a loan. He claimed customers were not paying him and he had a cash flow problem, but would be able to repay the loan. The indictment states Stewart knew he would not be able to repay the loan.

The indictment states the loan was for more than $10,000 in December 2019, but the AG's office said in a news release that the loan was for $50,000.

These are the first criminal charges to come out of the abrupt closure of Castle Builders in September 2019.

“A contractor who knowingly induces consumers to pay him money without intending to perform the promised services commits a criminal offense,” Maine Attorney General Aaron Frey said March 25 in a news release.

“Obtaining money through deception is not just bad business; it’s theft, and it directly harms consumers who have in many cases saved money over time to pay for these services.”

In addition to announcing the indictment, Attorney General Frey urged consumers to exercise caution when hiring home construction contractors.

“Maine does not license home construction contractors so consumers must proceed with caution when hiring a contractor,” said Frey.

“Ask your friends and family for the names of people who have done good work for them. Check references and do some research to determine if the contractor is reputable or has many complaints. Also, read Chapter 17 of the Attorney General’s Consumer Law Guide, which has information on Maine’s law governing home construction and repair contracts, and what you can do if you’re not satisfied with the contractor’s work.”

The Maine Attorney General's Office has already filed a civil lawsuit against Stewart and his wife Elizabeth Stewart and Castle Builders, accusing them of bilking more than 100 people out of more than $1 million.

In October 2020, the court appointed attorney Walter McKee of Augusta to serve as a neutral third party to mediate the civil lawsuit.

Assistant Attorney General Carolyn Silsby requested the appointment of a neutral third party, saying in court filings that the AG's Office and Stewarts were unable to reach an agreement on a mediator or on the process to conduct alternative dispute resolution. Alternate dispute resolution is required in civil cases.

In July 2020, the Stewarts filed paperwork with the court, claiming they were unable to pay their share of a mediator.

"We are without funds to pay half a mediator that costs $200 to $300 per hour." they stated in their court filing.

The Attorney General is suing the couple under the state's Unfair Trade Practices Law, claiming the Stewarts violated that law on multiple counts.

The AG began the investigation after numerous complaints were filed by customers, some before the couple closed their contracting business in September 2019.

In addition to the state's civil lawsuit, the case in U.S. Bankruptcy Court continues.

Filings in U.S. Bankruptcy Court in Maine by the Stewarts indicate they have claims against them totaling $1,215,877. This includes $165,234 in taxes owed to the government.

There are 177 creditors listed in their bankruptcy filing with most of them former customers of Castle Builders. Former workers, suppliers and the government are also listed as creditors.

A January filing in the bankruptcy case by the Maine AG's Office waives its claim to any of the money that the court-appointed trustee recovered for creditors. The trustee recovered less than $50,000 as of January this year.

The Stewarts operated Castle Builders for nearly three years before abruptly closing it and their Agway store in Union in September 2019.

The couple then moved to South Carolina to live with relatives.

The civil lawsuit alleges the Stewarts hired people to cold call homeowners in an effort to solicit business for Castle Builders. The Stewarts would then request down payments for work before beginning and often times would seek a second advance payment before any work was done.

Much of their work was faulty, according to the state, resulting in damages to homes. A lot of that damage came from not ensuring the properties were protected from rain and snow during repair work. In addition, electrical work was done by unlicensed workers and did not meet minimum standards.

The AG claims the Stewarts violated the unfair practice law by soliciting and accepting more than one-third down payments at the start. They also failed to give an expected start and completion time for the work as is required by the law.

Requesting and accepting second advances when work was not done was another violation of the state law, according to the AG.

The failure for the Stewarts to respond to the numerous complaints by customers about work not done also constitutes a violation, according to the lawsuit.

The Stewarts also failed to pay subcontractors, which left workers without money but also exposed homeowners to liability for the debt, the AG argues.

Malcolm Stewart could not be reached for comment following the indictment. No defense attorney is listed in court.

The Courier-Gazette contacted Malcolm Stewart by telephone in November 2019.

He said a lot of "false things" were being said about him, and that his attorney was "working on the resolving the matter." He would not comment further and did not detail what false things were being said.

The response filed by the Stewarts in the civil case includes denials to all the claims filed by the state.

"Plaintiff's alleged injuries and/or damages were caused by the negligence of third parties who Defendants had no control," the Stewarts stated.

In addition, the Stewarts claim the plaintiffs have "failed in their duty to mitigate damages and, therefore, are barred from recovery against the Defendants," the Stewarts stated in their written response to the court.

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Comments (10)
Posted by: Gregory D Kibitz | Mar 26, 2021 22:45

"Maine does not license home construction contractors so consumers must proceed with caution when hiring a contractor,” said Frey."


aka why deregulation is the problem, not the solution.



Posted by: Sam Charlton | Mar 26, 2021 12:07

We were customers of Castle Builders. Word was spreading around the construction community that Castle was in financial trouble in early March 2019. Workers were at that time being told to cash their paychecks at local businesses, rather than at a bank. Our home was having the last of  a painting job completed in the Spring of 2019. We notified the new painters who were working for Castle, not the same as the previous fall, what we had heard. Sure enough the 2nd week they worked at our house they were advised by their foreman to cash their paychecks at Wal-Mart. They were lucky, going directly to the bank Castle had an account with, they were able to be paid; unfortunately not every worker was.

Mr. Stewart knew what he was doing, he was a vendor at Windsor Fair taking deposits for promised work during Labor day 2019 knowing that work would never be done!



Posted by: James Bowers | Mar 26, 2021 11:46

Martha, the term "Christian" does not mean the same as when we were growing up.

 



Posted by: Francis Mazzeo, Jr. | Mar 26, 2021 10:59

In Maine if you have a pick-up truck and a magnetic sign you can be a contractor. We have license requirements for plumbers and electricians but that doesn't stop all of the handymen from performing these jobs. When we hire unlicensed and underqualified people to save a few bucks it doesn't always save anything.



Posted by: Susan Harriman | Mar 26, 2021 10:39

not only did they hurt so many people who faithfully gave them money with no work done, but think how it must hurt their children and their other families to realize what their loved ones did. It affected so many people, hope this will be resolved once and for all.



Posted by: STEVEN VITTUM | Mar 26, 2021 10:02

This action is way overdue.  The Stewarts methodically swindled thousands of dollars from their customers, including my poor sister who scrimped and saved to do renovations for her retirement business.  They have no shame and no remorse for their behavior - even skipping out of Maine to avoid consequences.  His wife should be indicted too, since she assisted him.  They both deserve as stiff a sentence as possible.  Maybe prison will allow them to reflect on how they impacted so many lives.  Shame on both of them!



Posted by: George Terrien | Mar 26, 2021 08:02

Please remind me:  why does Maine need to license contractors?



Posted by: Deborah Clarisse Morrison | Mar 26, 2021 07:17

About time something happened to them. Those poor people that were swindled out of their money...what restitution do they get??? They gave the deposit in good faith, some of these jobs were things that were dire repairs, yet they got less than nothing. Loss of money AND no repair!! They should go to jail for the amount of time the people had to earn the money AND go without the repairs.

 



Posted by: John Alden Shepard | Mar 26, 2021 06:42

Amen.



Posted by: Martha Johnston-Nash | Mar 25, 2021 18:53

It's about time something happened on this case! But I look at the comments made by him and the lawyer and all I can do is shake my head. You would think if they were as Christian as they portrayed, they'd take their lumps and accept the consequences. They knew what they were doing. Now, let's get on with the civil case as well!



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