Emily and Lori say in the last year and a half, their sister, Kim, lost more than 100 pounds, filed for divorce and became a member of a sexual fetish group — and they worry about the effect her new lifestyle is having on her 9-year-old daughter. Kim maintains that she’s happy and insists she cares for her daughter properly. She says she has no plans to leave the group or her new boyfriend, Stacy, who is also a member, and whom she plans to move in with. Emotions run high when Kim’s sisters meet Stacy for the first time — and Dr. Phil reveals a shocking secret from Stacy’s past. What explanation does Stacy offer? How much did Kim know? And, how will she respond when all the information is out on the table?

Catch up on what you missed in Part 1!

Stacy's Past Revealed

Kim explains that she met her boyfriend, Stacy, about seven months ago through a mutual friend, who also happens to be part of the group. She says that they talked online for several weeks before meeting in person. "The relationship that I have with Stacy is the healthiest relationship that I've ever been in," Kim insists. She adds that she doesn't think her sisters are giving Stacy a fair chance. "I’ve asked Emily to not judge him until she has met him," Kim says. "I think that she would find he’s a really decent guy and somebody who she’d like a lot.”

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Dr. Phil introduces Stacy to Emily and Lori — and Stacy quickly goes on the offensive. "The first thing I want to say is you're a lying dog," he tells Emily. "You started out saying that Kim's daughter is uncomfortable around me. Tell me, why does she have one of my shirts and won't let it go?"

"That's disgusting. She shouldn't have one of your shirts," Emily replies. "You're not her dad. You're not related to her. You have no business being around her," she insists.

Dr. Phil tells Kim and Stacy that he wants to get everything on the table before they can move forward. He asks Stacy if he's been completely honest with Kim about his background, and he replies that Kim knows everything, including details about his relationship with his ex-wife. Kim adds that she has done a background check on Stacy and says she found "a lot of stuff that I'm not going to go into, because that is his life."

"We are going to go into it," Dr. Phil replies. "It's public record." He turns to Stacy and says, "You need to be honest. It's coming out ... If you say that this is not a problem, then put it out there."

Stacy admits that in 2004, he was charged and pled no contest to possession of child pornography, and that as a result, he is a registered sex offender. He insists that the entire thing was an accident, explaining that he opened a zip file without knowing what it contained. "I think they had a flag in the zip file or something," he says, explaining how he was caught. When Dr. Phil asks why he didn't fight the charges, Stacy says, "Possession is nine-tenths of the law, no matter what it is." He adds that he told Kim about the incident from the start, well before he ever met her daughter, a fact that Kim corroborates.

"They said you had a binder of these images as well ... How does that happen by accident?"

Hear the shocking statements police say Stacy made in his interview — and his response. "I did cop an attitude."

James, Kim's soon-to-be ex-husband, and the father of her daughter, tells Dr. Phil that he didn't know the full extent of Stacy's past. "I'm very ... My main concern is for my daughter," he says, as he sits stunned.

Dr. Phil tells Kim that, according to police, the children in the photos on Stacy's computer were in an age range that would include her daughter.

"I know that," Kim responds. "But he never saw the pictures. He opened up the zip file, realized it was bad and tried to delete them," she insists. "That is one thing that they told me, was that they could tell he immediately went to trying to delete the stuff. There was no extensive cropping or editing or viewing or anything."

"Why would the police say you had a binder and quote you as saying you made it 'a long time ago'?" Plus, Kim defends Stacy.

Emily and Lori react. "It's disturbing. I'm more concerned now than I ever was."

An Expert Weighs In

Dr. Phil introduces Robert Leazenby, special agent and supervisor for the Wyoming Internet Crimes Against Children Task Force, who has been working with the FBI on investigations into people processing and sharing child pornography. He says that in his 11 years of experience on these types of cases, he's only seen one instance where someone genuinely accidentally downloaded child pornography.

"He claimed the interview was five hours and he basically gave in to the interviewers. In reality, it lasted about 10 minutes.”

“I look at this, and it appears to me to be a high risk situation that would be worthy of a high degree of vigilance and protection," Dr. Phil says to Robert. "Am I overreacting?"

"Everything in this case indicates that this child is at a much higher risk than the average child," Robert responds.

Kim insists that she has taken steps to make sure that her daughter is safe. "He's not alone with her," Kim says, indicating Stacy. She adds, "Part of that is also that I have always told my daughter that if she can't talk to me, I want her to tell anybody, a teacher, somebody."

Moving Forward

“What I’m trying to tell you is that there are significant risk factors here, just statistically," Dr. Phil tells Kim. He is careful to clarify that Stacy has never been accused of having any inappropriate contact with children. But, he emphasizes, "You can't ignore that this would be a higher risk situation than normal," and Kim agrees. Dr. Phil explains that sex offenders actually have some of the lowest rates of re-offending, compared to other criminals. "However, that is when they have participated in an evidence-based, community-centered treatment program beginning in prison and continuing after prison," he qualifies. "I can find no evidence of any kind of intensive intervention on your part," he tells Stacy.

“He has been asked by me as well as public officials that, at any given moment, if they would ask him to take whatever their tests are, would he be willing to do it? And he said, 'Yes, anytime,'" Kim says. "They said, 'Can we walk in your home? Can we look at your computers at any time if you're going to live with her?' He said, 'Yep, walk in any time you want.'"

"I can tell you if this was my child and this person was coming within a country mile of my child, that would be going on," Dr. Phil says. "That would be a price of admission." He emphasizes again, "That low re-offense rate is on the heels of the kind of intervention I'm talking about, which is not happening here."

Dr. Phil offers Kim and Stacy professional help — will they accept? And, what does Kim say she wants from her sisters?