CSLB and Attorney General Stop Fraudulent Service & Repair Contractors
Judge orders fines and restitution for victims
SACRAMENTO -The Contractors State License Board (CSLB) and California Attorney General Edmund G. Brown Jr. announced the settlement of a lawsuit today that will force SRVS Charge Inc. (SRVS) to pay $3 million in penalties and restitution. This is the largest enforcement judgment in CSLB's 80-year history.
Companies operated by SRVS, the parent company, cheated an estimated 6,000 Californians each year out of millions of dollars by charging exorbitant prices for substandard electrical, plumbing and heating/air conditioning repair performed by unlicensed and unqualified individuals.
"The Board is serious about cracking down on illegal operators who are ripping off consumers and giving licensed, legitimate contractors a bad name," said CSLB Registrar Steve Sands.
Months of investigation by CSLB found that SRVS had been involved in overpriced, substandard home repair since 1989.
To stop the companies' illegal practices and provide restitution to victims, CSLB and the Attorney General reached a settlement with:
- SRVS Charge Inc. and its affiliates,
- Principal owner, Sarkis Terabelian, 43, of Burbank;
- General manager, Zohrab "Rob" Mkhitarian, 40, of Burbank ;and
- Associates Marine Metspakyan, 33, of Burbank; Avetik Avo Gyandzhyan, 38, Lilit Lusparyan, 28, and Estine Akopyan, 28, all of Glendale; Alisa Oganyan, 35, of North Hollywood; and Vardui Terabelian,45, of Van Nuys.
These defendants operated various service and repair companies that employed unlicensed electricians, plumbers, and heating and air-conditioning technicians in Southern California, the San Francisco Bay Area, and the Sacramento region. These companies routinely targeted elderly Californians.
SRVS operated its scheme like this:
- The company bought millions of dollars in telephone directory advertising, including many full-page ads. The ads, that listed different company names, claimed a 100% satisfaction guarantee and senior discounts. When customers called the numbers listed in any of the ads, they would be directed to a central call center.
- Many times, repairmen would be dispatched from a different company than the customer called.
- Often, these workers had not undergone the criminal background check required of all contractors and Home Improvement Salespeople licensed by the CSLB since January 1, 2005.
- Customers were charged high prices for emergency home service and repair, often unrelated to the actual home repair work. Much of the work was poorly done or never completed.
- If a customer refused to pay, the company would file a lien against the home to force payment.
The company's use of multiple business names made it difficult, and in some cases impossible, to hold these fraudulent operators accountable for incompetent and incomplete work. These companies often denied their customers refunds, in spite of the "100% satisfaction guarantee" that were promised in their ads.
Over several years, CSLB and the Attorney General shut down affiliates of SRVS. But the defendants continued to run their company under a labyrinth of interchangeable business names and fraudulent contractor license numbers. When CSLB either revoked a license or received an excessive number of complaints, the company would establish a new corporate identity, and continue its bogus business practices.
CSLB conducted undercover stings against service technicians suspected of using these fraudulent licenses and referred instances of the illegal activity to the San Diego, Los Angeles, Santa Clara, and Sacramento County District Attorney's Offices. In one instance, the San Diego County District Attorney's Office found that a service technician had also committed burglary and theft. That technician is now being prosecuted for those crimes.
The settlement, conducted in San Diego County Superior Court, provides for the following:
- A permanent injunction against the defendants' prior illegal activities. This includes:
- CSLB monitoring of the defendant operations for one year;
- Mandatory registration of all company service technicians with CSLB. This requires technicians to undergo a criminal background check;
- Limiting the number of business names and licenses that the defendants can use;
- Preventing the defendants from charging fees that have nothing to do with the actual work that is performed;
- Fully disclosing to CSLB the names of the directors, officers, and employees of their company; and
- Mandatory customer complaint tracking with proper complaint investigation and reasonable efforts to resolve them.
- $3 million in penalties and restitution to be distributed, as follows:
- $1.3 million to be used for consumer restitution;
- $450,000 to be assessed in penalties for state Business and Professions Code violations; and
- The remainder to be used to reimburse CSLB for investigative and legal costs and costs of monitoring future compliance with the judgment.
CSLB is asking people who believe they were victimized by any of the following businesses and have documents to verify their claim to contact the Board at 1-800-321-CSLB (2752), and press 7:
- American Electric (CSLB #834398)
- American Home Repairs, Inc. (CSLB #834206)
- 59 Minute Service (CSLB #837697)
- Cal Repair Services, Inc., dba Pick Red Plumbing (CSLB #797241)
- Answering Resources, Inc., dba Thrifty Electric (CSLB #723375)
- Orbell Enterprises, Inc., dba Plumbing One (CSLB #713006)
- USA Services, Inc. (CSLB #775863)
- Love My Home, Inc. (CSLB #811361)
- Electric Avenue, formerly A Plus Electric Company (CSLB #569322)
- American Electric 911 Fast Inc. (CSLB #826916)
- Pro Electric Co. (CSLB #670171)
- RG Electric (CSLB #516892)
- Pacific West Heating & Air Conditioning (CSLB #604150)
Defendants may be held in contempt and face jail time if they violate any terms of the settlement.
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