The former owner of the defunct Castle Builders contractor company in Union, who is charged with stealing nearly $500,000 from customers, pleaded not guilty May 20.

Malcolm Stewart entered his pleas May 20 during an online Zoom arraignment before Justice Jeffrey Hjelm, who was at the Knox County Superior Court.

Justice Hjelm accepted a bail agreement reached between the defense and Maine Attorney General's Office, where Stewart will remain free on $50,000 unsecured bail.

He must sign a Maine Pre-Trial Contract and have no contact with the scores of alleged victims. He must also turn in his passport, noting Stewart is a Canadian citizen and has a green card.

Justice Hjelm told Stewart his request for the court to appoint an attorney for him at no cost was denied because the court screener did not find him indigent.

Stewart has been represented by attorney Kevin Sullivan of Gardiner, but that representation was to last only until the arraignment was held.

Stewart's next court appearance is scheduled for July 27.

Assistant Attorney General Suzanne Russell represented the state at the hearing.

Gardiner previously asked Stewart be released pending trial. This would allow him to receive life-saving kidney dialysis treatment, according to his attorney.

Stewart was indicted March 25 by a Knox County grand jury for two counts of theft by deception.

Stewart now resides in Pelzer, South Carolina.

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, Waldo, Hancock, Kennebec, Lincoln and Somerset counties.

The other theft count 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.

The Maine Attorney General's Office 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.

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 the court-appointed trustee recovered for creditors. The trustee recovered less than $50,000 as of January this year.

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.

The Stewarts have denied the claims in the civil lawsuit.