5 On Your Side

Former owner of Peak Fitness banned from business in NC

Posted May 22, 2012 3:55 p.m. EDT
Updated May 23, 2012 8:04 a.m. EDT

— A former health club owner can't open a new club in North Carolina for at least 12 years, North Carolina Attorney General Roy Cooper said Tuesday.

The punishment comes after Jeffrey R. Stec repeatedly violated state laws requiring health clubs to maintain a fund to pay back customers with long-term contracts if a club goes out of business.

Stec and his business partners have been the subject of hundreds of complaints over more than six years stemming from clubs called Beyond Fitness and Peak Fitness.

The Attorney General's office sued in 2007, alleging the clubs engaged in deceptive advertising, bounced checks and failed to pay refunds. Stec struck a deal in 2009, promising to provide Cooper’s office with proof that the clubs had the adequate bond money.

Within a year, the clubs filed for bankruptcy. The state sued again, and Tuesday's judgment is a resolution of that suit.

Stec is banned from working in the health club business anywhere in the state, and if he does, he faces a $2 million fine.