DOJ sues company behind thousands of fake home service businesses

U.S. authorities are cracking down on a Chicago-based company allegedly running a widespread home services scam. 

What’s happening: The Department of Justice, acting on a referral from the Federal Trade Commission and Illinois Attorney General, on Monday filed a federal lawsuit against B.E.S.T. GDR, which does business as Premium Home Service (PHS), and Yosef Bernath, its founder and CEO. 

• Minnesota’s Attorney General also filed a lawsuit on Monday, alleging violations of various consumer fraud laws and deceptive trade practices. 

Catch up quick: PHS has created thousands of websites across the country and “over 15,000 fake business profiles on Google Search and Maps” to advertise fictitious HVAC, plumbing, and electrical businesses as though they were reputable businesses with local addresses and phone numbers, the lawsuits allege. 

• Calls have been routed overseas, and PHS representatives have charged customers service fees, then subcontracted work to third-party contractors who were often unlicensed or unqualified, and did shoddy work or didn’t show up, they add. 
• In just seven Minnesota area codes, PHS has used more than 950 telephone numbers. 

Go deeper: “The complaint further alleges that the defendants posted fake consumer reviews which praised their fake business profiles,” the DOJ wrote in a news release. “In doing so, the defendants allegedly misappropriated the images of people from the staff directories of unrelated websites.”

Why it matters: While such scams deceive customers, they also skew search results and divert business away from legitimate contractors.

• A Minnesota TV station in 2024 launched an investigation after several contractors reported their leads had suddenly dried up and their Google listings or phone numbers had been hijacked, with calls rerouted to PHS. 
• The station traced PHS’s operations to Bernath — and to a call center in the Philippines — and found that the company had raked in more than $79 million in “suspicious profit” over an unspecified period. 

State of play: “Since at least 2018,” PHS has “deceived well over 100,000 consumers,” according to the Minnesota AG’s lawsuit. 

Looking ahead: The DOJ’s complaint seeks “a permanent injunction to prohibit the defendants from future violations, monetary civil penalties, and redress for injury caused to consumers,” the agency said Monday. 

• PHS hasn’t publicly responded to the lawsuits and didn’t return a voice message left by Homepros before press time.