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California shuts down Armenian â€œHome Repairâ€ service defrauded 120 000 Californians over 20 years

16 April 2009 07:44 (UTC +04:00)

Attorney General Edmund G. Brown said a massive service and repair scheme headed by Sarkis Terabelian, 43, defrauded thousands of California homeowners who were charged exorbitant fees for shoddy and woefully inadequate home repair work by unlicensed and unskilled contractors. The defendants operated various service and repair companies that employed electricians, plumbers, and heating and air-conditioning technicians in Southern California, the San Francisco Bay Area, and the Sacramento region. A months-long investigation by the Attorney General’s Office and the Contractors State License Board found that SRVS Charge Inc. and its affiliated companies had been cheating some 6,000 customers each year for overpriced and substandard home repair work since 1989. These companies routinely targeted elderly Californians. The company placed millions of dollars in telephone directory advertising, including many full-page ads. The ads, which 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. 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. Because the company used multiple business names, it was difficult, if not impossible, for customers to seek recourse for incompetent workmanship, incomplete work, or any other issue that arose on their project. Customers were often denied refunds, despite the existence of the "100% satisfaction guarantee" promised in the ads.
Exorbitant customer fees enabled Sarkis Terabelian, and his associates to purchase two helicopters, a Mercedes-Benz, and real property valued in excess of $1 million. Attorney General Brown entered into a final agreement with the defendants in San Diego Superior Court on March 12, 2009. A permanent injunction against the defendants’ prior illegal activities includes $3 million in penalties and restitution as well.