A state appellate court has reinstated a complaint against three out-of-state siblings sued by the state attorney generals office for alleged affiliations with a company that scammed soldiers.
Stuart L. Jordan, John Paul Jordan and Rebecca Wirt, all of Fayetteville, N.C., were dismissed from a state Supreme Court lawsuit by Judge Hugh A. Gilbert in November 2010 after arguing the court lacked jurisdiction over them because they never personally conducted business within the state.
The attorney generals office included the three as defendants in a suit filed in May 2010 as part of an action against Rome Financial Co. Inc. of California, which operated a SmartBuy at Salmon Run Mall. The Watertown store closed abruptly in April 2010, after the company learned it was under investigation by the attorney general on allegations that it, through its financing agreements, charged 225 percent to 325 percent more for computers and electronics than a person would have paid had he shopped elsewhere.
The attorney general claimed all of the inventory for the Watertown store was purchased at full retail price from several big-box stores in North Carolina and then resold by SmartBuy at greatly inflated prices and with excessive and usurious financing arrangements. It was alleged that SmartBuys nine locations nationwide all were set up near military bases and that store personnel were instructed to sell only to active military members, even though the stores ostensibly were open to the public.
In August, Attorney General Eric T. Schneiderman announced a $3.5 million settlement with Rome Financial that allowed debts for 995 Fort Drum soldiers to be wiped away and for the soldiers to keep the purchased items. Separate litigation against SmartBuy and four of its solvent finance companies, Frisco Marketing of N.Y. LLC, Integrity Financial of North Carolina Inc., Britlee Inc. and GJS Management Inc., continued.
According to court documents, Stuart Jordan is the chairman of Frisco Marketing and an officer or director of Integrity Financial and Britlee, while Ms. Wirt is an officer or director of Integrity Financial and Britlee, and John Paul Jordan is an officer or director of Integrity Financial.
In a decision released Friday, the state Appellate Division, Fourth Department, ruled the attorney general had demonstrated that the lower court had jurisdiction over the three. The attorney general had argued the siblings controlled the businesses, signed leases for stores where the alleged fraudulent sales took place, were officers of corporations that made the sales and also were officers of the corporations that financed the sales at alleged deceptive and usurious rates.
Citing case law, the appellate court ruled a state court may exercise jurisdiction over an out-of-state resident who in person or through an agent conducts business in the state or contracts anywhere to supply goods or services within the state. The upper court said, in considering a motion to dismiss, the court must accept the plaintiffs allegations as true, and that based on evidence provided by the attorney general, the three had conducted business transactions in the state even though they may never have entered the state.