GLENDALE — Three Glendale residents, along with five other people, were ordered to pay $3 million in penalties and restitution as part of a settlement that alleged their city-based company charged thousands of customers for shoddy and overpriced home repair work, officials announced Monday.
Avetik Avo Gyandzhyan, 38, his wife, Lilit Lusparyan, 28, and Estine Akopyan, 28, worked for the Glendale-based parent company, SRVS Charge Inc., and its affiliated companies, which overcharged about 6,000 customers each year for poor-quality home repair since 1989, according to the state attorney general’s office.
Attorney General Edmund Brown Jr. and the California’s Contractors State License Board reached a settlement March 12, but they announced their agreement with the three Monday.
Alisa Oganyan, 35, of North Hollywood, Vardui Terabelian, 45, of Van Nuys, and Burbank residents Marine Metspakyan, 33, Sarkis Terabelian, 43, who owned the Glendale company, and Zohrab Mkhitarian, 40, who was the company’s general manager, were also named in the settlement and ordered to pay restitution.
“In addition to taking action against the principals of this company, we made it a priority to get restitution for victims of this scheme,” board spokesman Rick Lopes said. “Over the past 20 years, the [board] has taken a number of administrative actions against the company.”
Of the $3 million the eight must pay in penalties and restitution, $1.3 million must be used to repay customers, according to the attorney general’s office.
As part of the settlement, the board will monitor the eight’s operations for a year, and they will be required to register all company service technicians for a year with the board so criminal background checks can be done.
The eight will be prevented from overcharging customers and imposing fees that aren’t applicable to the work that was done. They will only be allowed to use a maximum of five business licenses and must disclose directors’, officers’ and employees’ names.
They are forbidden to engage in false advertisement and must keep track of customer complaints, which they must investigate and try to resolve.
“By putting these strict restrictions in place, we’ll have a much better ability to keep a close watch on their activities,” Lopes said. “If they break terms of the settlement, they can be found in contempt and could face jail time.”
The attorney general’s office and the board investigated the eight’s activities for a month.
The settlement is the largest in the board’s 80-year history.
The eight reportedly operated 14 service and home repair companies, including the parent company and six other Glendale-based businesses. They placed millions of dollars’ worth in telephone directory advertisements, which listed the companies’ names and offered senior discounts.
Customers who called the phone numbers in the ads were directed to a call center, which dispatched repairmen, such as plumbers, electricians and heating and air-conditioning technicians, to the customers’ homes. But the workers were often from a different company than the customer called.
The workers had not undergone criminal background checks, and some were found to have fraudulent contracting licenses and a criminal history.
Customers were charged high prices for shoddy or incomplete work, and if they refused to pay for the work, the parent company filed a lien against their homes in order to get payments.
Since the parent company used multiple business names, customers couldn’t track them, and they were often left to deal with incomplete work on their own.
“As evidenced in our lawsuit and the final settlement, the principals of this company showed that they are willing and quite capable of moving their operations around and hide behind different licenses, acquired both through forgery and by renting from a third party,” Lopes said.
“Simply stripping them of their license, we don’t believe would have stopped them from operating. It would have only driven them further underground.”
When the board revoked their licenses or got numerous customer complaints, the companies often changed their names and businesses and would continue working.
The eight reportedly used the customers’ fees to purchase two helicopters, a Mercedes Benz and real estate property, according to the attorney general’s office.
The total number of customers who were cheated is almost impossible to determine, Lopes said.
“Dozens of victims were part of our investigation and the lawsuit,” he said.
“We’re now urging other potential victims to come forward.”
The California’s Contractors State License Board and the attorney general’s office identified the following companies as businesses that worked under the Glendale-based parent company, SRVS Charge Inc., and overcharged customers for shoddy home repair work.
Pleasanton-based American Electric
Sacramento-based American Home Repairs, Inc.
Sacramento-based 59 Minute Service
Glendale-based Cal Repair Services, Inc.
Glendale-based Answering Resources, Inc.
Glendale-based Orbell Enterprises, Inc.
Campbell-based USA Services, Inc.
San Rafael-based Love My Home, Inc.
Glendale-based Electric Avenue, formerly A Plus Electric Company
Glendale-based American Electric 911 Fast Inc.
Los Angeles-based Pro Electric Co.
Glendale-based RG Electric
Corona-based Pacific West Heating & Air Conditioning
Anyone who believes he or she was defrauded by these companies may call the board at (800) 321-2752 and press 7.