A federal bankruptcy court for the Southern District of Florida has ruled that the owner of a computer-financing scheme cannot hide behind a bankruptcy filing to shield himself from complying with a contempt order that required him to pay $13.4 million for violating an FTC order.

Joseph K. Rensin founded BlueHippo Funding, LLC and its subsidiary BlueHippo Capital, LLC (collectively “BlueHippo”) in the early 2000s and was the CEO and sole owner.  BlueHippo marketed computers by targeting customers with poor credit histories.  By 2008, BlueHippo agreed to settle FTC charges for failing to deliver computers to expectant customers and failing to disclose the details of its store credit policy.

In 2016, a federal court found Rensin and BlueHippo in contempt for operating the deceptive computer financing scheme in violation of a federal court order.  The court entered a $13.4 million judgment against Rensin and BlueHippo for the harm consumers suffered related to the scheme.

When Rensin refused to pay the $13.4 million contempt judgment, the FTC sought to have him jailed until he paid the amount owed.  Determined to evade the judgment, Rensin filed for bankruptcy.

The bankruptcy court for the Southern District of Florida, West Palm Beach Division, held that the 2016 contempt judgment could not be discharged because Rensin “was at the helm of and guided BlueHippo in its every action in connection with this fraud.”

“In this case, the fraudster tried to avoid justice by declaring bankruptcy,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection, in an FTC press release.  “When the FTC gets a judgment against a proven wrongdoer, we will not stop until our work is complete, no matter how many legalistic tricks and loopholes the scammer tries to employ.”