KARE 11 Investigates: Phantom Fixers

KARE 11 Investigates: Phantom Fixers

A KARE 11 investigation exposes a multimillion-dollar network of thousands of fake home repair companies deceiving customers nationwide.

Jeff Arney is your posterboard local small businessman. For 14 years, he's successfully run the Cottage Grove-based plumbing company, Arney Plumbing. But earlier this year, Arney said his usual flow of business dried up, and he did not know why.

"We are not getting any new clients," he said. "I may not be in business too much longer."

It wasn't until a customer filed a police report, claiming they were scammed by someone they thought was Arney Plumbing, that he learned his Google Business listing had been hijacked.

“When you type in Arney Plumbing, you end up with the wrong phone number and the wrong people taking money and showing up to your house,” Arney said.

Areny reached out to KARE 11 Investigates asking for help.

That tip from a local plumber launched what would become a nationwide investigation exposing thousands of hijacked or outright fake home repair companies, tens of thousands of deceived customers — and more than $79 million in suspicious profit.

The web of deception all traces back to one Chicago-based company: Premium Home Service.

"They're wrecking my reputation... it's my name on there with their phone number," Arney said.

The Google listing showed Arney Plumbing’s pictures and five-star reviews, including one written by KARE 11's A.J. Lagoe, who hired the real Jeff Arney for a job. Those glowing remarks were now pasted on a listing with the same company name but a different phone number, routing unsuspecting customers elsewhere.

“I didn’t get the plumber that I thought I was hiring," said a prospective Arney Plumbing client named Gary, who asked that his last name not be used.

In need of a plumber to replace a leaky faucet, Gary Googled “plumbers near me” and called the listed number for Arney Plumbing.

Gary told KARE 11 he provided his credit card over the phone to pay a $169 service subscription fee and was told someone would be out that day.

Instead, his card was charged $1,700, and Gary said the man who showed up for the job — who introduced himself as “Jeff” — did more damage than repair.

"He broke both of the shut-off valves," said Gary. He filed a fraud report with his bank to stop payment.

Another customer, named Kathleen, filed a police report in Cottage Grove claiming she’d been swindled when she hired a plumber to repair a broken sump pump that was causing her basement to flood.

She’d found a company named Cottage Grove Plumbing Heating Air Conditioning Electrical Water Heater Repair & Duct Cleaning LLC.

Again, someone showed up, charged Kathleen hundreds of dollars, did not fix the sump pump and could not be reached for follow-up.

When she started looking into the company’s Google listing, she noticed despite the company’s listed name, all the pictures and reviews belonged to Arney Plumbing — including the review left by KARE 11’s A.J. Lagoe.

It was yet another variation of Arney Plumbing’s hijacked business listing. State records show the other company is not legally registered.

“They do not have a plumbing license,” said Arney, “They don't have a mechanical license. They don't have an electrical license. None of the stuff that makes you a legal company to work in the state.”

KARE 11 discovered other Minnesota businesses have been similarly targeted.

"I stopped getting calls for a week or two; don’t know how long it was hacked," said Mike Steigen, owner of Integrity Furnace and Duct Cleaning.

He too had the Google listing for his Woodbury duct cleaning business hijacked.

"They had taken my phone number and switched it ... so when you go to call it you think you’re getting Integrity, but you’re getting who knows who."

Steigen told KARE 11 that after he discovered the issue, he was able to get Google to change his listing back to reflect the correct phone number, but the hack cost him weeks of work.

“It can devastate a business,” Steigen said.

High Stakes, Low Effort

“It’s actually very easy for bad guys to take over the online persona of a small business,” said Mark Lanterman, chief technology officer for Forensic Computer Services. He said scammers often look for small businesses that have left their Google listing unclaimed.

“Anyone can just claim that they are the owner of that company. Log in, and you can change information for the company.”

Jeff Arney said he’s no cop but thinks hijacking his Google profile and stealing customers should be illegal. However, police reports have, to date, gone nowhere. Police classified one filed in Cottage Grove as “civil in nature,” stating, “there would be no further investigation into this matter.”

But still, “the stakes can be really high,” Lanterman said. In addition to customers being deceived, small businesses, like Arney Plumbing, take the brunt of it.

When he reached out to KARE 11, Jeff said he’d already had to lay off one full-time employee because his billable hours had plummeted from 60 per week to averaging just four for nearly two months.

“We are not getting any new clients because of these people hacking us.”

When KARE 11 contacted Google, the company agreed to fix Arney’s listing and said when it finds scammers trying to mislead people, it takes swift action.

“We do not tolerate attempts to mislead people,” said a Google spokesperson. “We reverted these inaccuracies, suspended the malicious accounts involved, and are always applying new protections to prevent further abuse. It’s our priority to provide a safe and helpful platform for users and businesses.”

Follow The Money

KARE 11 Investigates set out to determine who was behind the fake business and hijacked Google listings, which deceived customers and generated devastating impacts on local businesses.

To start, we followed the money.

Credit card charges for customers who thought they were hiring Arney Plumbing were traced back to a company called Premium Home Service (PHS).

“At no point did that name come up,” Gary, the deceived customer told KARE 11, “until I started getting bills from the bank on my debit card that had that name on it.”

Despite clearly doing business in Minnesota and collecting money from customers, the Minnesota Secretary of State's website shows no company by that name currently registered to legally operate in the state. But internal company records obtained by KARE 11 Investigates confirmed at least 10,000 customers in Minnesota did business with Premium Home Service — many unknowingly.

Business filings show Premium Home Service is legally registered out of Chicago. In online videos and job postings, PHS bills itself as the “fastest growing company here in the United States” with over a million clients.

PHS’s listed CEO and owner is a man named Yosef Bernath, who advertises his business across social media platforms promising a nationwide job network for independent contractors. “Thousands of Premium Home Service members nationwide ensure a steady flow of jobs,” he claims.

No one from the company responded to KARE 11’s repeated attempts to reach them for an interview.

The Better Business Bureau gives the company an “F” rating and has a nationwide list of consumer complaints about “stolen money,” “fraud” and allegations that “technicians sent out by Premium Home [Service] were not licensed professionals and created more damage to the consumer's home during the service call.”

When KARE 11 knocked on the door of Premium Home Service’s legally registered address — 6723 N. Sacramento Ave., Chicago, Illinois — a woman answered who said she was Yosef Bernath’s mother. However, when asked about Premium Home Service, she provided no details, saying she was going inside to pray and that her husband might talk with us before going inside and closing the door.

Neighbors said they knew Yosef and the Bernath family but had never heard of Premium Home Service.

KARE 11 waited but no one else came out of the house.

A PHS manager based in Chicago did not have much to say either. Levi Melamed closed the door when KARE 11 asked questions about Bernath, saying only, “I no longer work with them.”

KARE 11 tracked Yosef Bernath to a home address in a St. Louis, Missouri suburb where an online video shows him being celebrated for generous donations to a local religious school.

There was a marked PHS truck — along with a Cadillac Escalade and Lamborghini — parked outside the home. Neighbors confirmed that Yosef lived there with his wife and the Lamborghini belonged to him.

When we knocked, no one answered, despite house lights being on.

KARE 11 left a card on Yosef’s sports car, asking him to call. He has not.

Back in Minnesota, court records reveal troubling allegations.

What A Story There Is

In 2021, Horizon Roofing Inc., a Waite Park company in business in Minnesota since 1976, received strange complaints about its work from people who were not its actual customers.

They discovered the customers were actually dealing with a company listed on Google with a suspiciously similar name: Horizon Roofing Repairs.

However, there was no record of Horizon Roofing Repairs being registered with the Secretary of State as a company or assumed name.

The Stillwater address listed on Google was also fake.

Lawyer Aaron Dean was hired by the real Horizon Roofing, and he traced the fake listing back to Premium Home Service-affiliated entities.

“What a story there is!” Dean exclaimed when contacted by KARE 11.

On behalf of his client, Dean took Premium Home Service to court seeking a restraining order, claiming they were fraudulently obtaining business with a web of “fictitious companies” and “fictitious addresses.”

“It’s identity theft,” said Dean. “You’re showing up at potential customers' homes or businesses and pretending to be someone that you aren’t.”

In Ramsey County Court, Chicago lawyer Motty Stone showed up to represent Premium Home Service. He told Judge Leonardo Castro that his clients were doing “absolutely nothing illegal,” and claimed Premium Home Service is just “very good in understanding how to be listed high on Google.”

Judge Castro disagreed and ordered Premium Home Service to stop impersonating Horizon Roofing Inc.

That day in court, Dean called Premium Home Service “just internet scammers.”

“It was accurate then; it is accurate today,” Dean said.

Something That's Nothing

As KARE 11 continued to investigate PHS in Minnesota, we met customers like Denise Messig and Daniel Tolvay. The Minnesota couple originally thought they were dealing with a local company.

“We’ve had squirrel issues,” said Messig, who turned to Google for a local roofer. She found Harper Roofing.

“Because online, they said they were from Cottage Grove. So, I figured it’s a local company, give my business to local businesses.”

But Messig and Tolvay said the crew sent out by Harper was unprofessional, broke windows, smashed gutters and used warped wood for the job.

When follow-up with their concerns proved difficult, they paid Harper Roofing a visit, only to discover there was no company.

“It was actually a vacant lot. A vacant lot with nothing there,” Tolvay said, adding, “Why would they have an address to something that’s nothing?”

Down the street from Messig and Tolvay’s house, KARE 11 found another example of a fictitious address linked to PHS. Denise and Dan’s Grenadier Avenue neighbors were listed on Google as the location of Cottage Grove Plumbing Heating Air Conditioning Electrical Water Heater Repair & Duct Cleaning LLC., the company getting customers from Arney Plumbing’s hijacked business listing.

But instead of a plumbing business, it’s just a family home where the resident said he had no connection to an entity calling itself Cottage Grove Plumbing.

While standing outside the address, KARE 11 called the listed number.

The person who answered said he was with Cottage Grove Plumbing and his name was “Bob.”

However, he could not provide a plumbing license number and mispronounced the name of the street where he falsely claimed his business was located.

KARE 11 discovered hundreds of fake addresses in Minnesota for home repair contractors that we ultimately tied to PHS business listings and thousands more across the country.

Some turned out to be empty lots.

Others were strip malls, grassy medians near highways or building suites that do not exist.

The Whistleblowers

While Yosef Bernath and PHS have not responded to months of repeated inquiries about their business practices, KARE 11 tracked down former employees just waiting to blow the whistle.

“None of it made sense to me,” said Liz Redler.

Redler said she was hired in 2022 to help manage the company’s operations, but only lasted a month because of all the problems she uncovered.

"Something wasn't right,” she said, “Or multiple things, multiple things weren't right with them.”

Redler said she learned the company was operating in states where they were not registered. She says she also discovered they were not properly paying taxes in states like Minnesota — despite collecting income there.

When she began to inquire about some of the questionable practices, "'Don't worry about it' is what I was told," she said. “But I knew it wasn’t right.”

Redler said PHS used a call center in the Philippines to handle customer calls to their seemingly endless Google home repair business listings, which numbered in the thousands.

She told KARE 11 we should speak to a man named Ryan Reagan who had been a manager at the call center.

“When I first started,” Reagan said, “all I knew was they were a company that provided home repair services.”

Reagan is an expat living in the Philippines who worked for a call center run by Exelligence Business Services. Its only client, according to Reagan, was Premium Home Service.

He said there were upward of 90 agents fielding thousands of calls from clients across the U.S. and Canada, who thought they were dealing with a local contractor.

He said the business' name was the only information that call center dispatchers had to tie the listed address and the number the customer was calling together.

“I started to figure out that these addresses we were giving people are just dummy addresses — they don’t go anywhere — or they’re hijacked addresses,” Reagan said.

He told KARE 11 the call center operators were instructed to attempt to sell the customer on purchasing a Premium Home Service subscription and promise someone would be dispatched shortly.

He says he also learned the PHS workers being dispatched to customers’ homes were often unlicensed, not background checked, and included at least one registered sex offender.

“I really started to understand that there is a problem here,” he said. “There were some really serious concerns that we had because we kept getting complaints from customers.”

Reagan said he tried to sound the alarm internally to his boss at the call center and with PHS managers directly during multiple trips to meet with them in Chicago. It was to no avail.

When he asked during one of his Chicago trips about the fake addresses his call center was giving customers, he said he was told the majority of them were not registered businesses and are “just made-up names.”

He quit in 2023, citing concerns in his resignation letter about Premium Home Service’s business practices.

“While our client may see these practices as calculated business risks, I perceive them as potential felonies. This has been a significant source of discomfort for me, and I have struggled to reconcile my personal values and principles with the actions I have been asked to take on behalf of our client,” he wrote.

Reagan provided KARE 11 with company data which he said he had also turned over to investigators with the Federal Trade Commission who interviewed him in early 2024.

That data helped KARE 11 identify more than 400 PHS businesses listed on Google in Minnesota. Nationwide, there are more than 7,000 listings associated with nearly 16,000 phone numbers.

Harper Roofing, the company Denise Messig and her boyfriend Dan hired to work on their Cottage Grove home, was among those listed. “Makes you feel duped,” said Denise.

The leaked data revealed from 2018-2023, PHS brought in at least $6 million from Minnesota customers alone and more than $79 million from customers nationwide.

The FTC refused to confirm whether they have an active investigation underway into Premium Home Services.

However, one customer has been investigating them for years.

Donut Shop In A Strip Mall

In 2022, Ross Edmondson looked for an electrician to work on his Sugar Land, Texas garage office's AC.

“I went to Google Maps, and I looked for some local electricians,” Edmonson said. But the company he hired, calling themselves Horton Electrical, took his money for a membership subscription that waived the dispatch fee — then never showed.

When he tried to pay Horton Electrical a visit at their listed address, he discovered it was a donut shop in a strip mall. “It seemed like it was an entirely fabricated business,” he said.

The email receipt for the subscription he paid for had another name on it: Premium Home Service.

“I ended up spending a few days digging into them,” Ross said, “to try and find out more information.”

Days turned to months, and now into two years.

An engineer by trade, Ross says he’s no stranger to the workings of the internet. After doing some initial digging and noticing red flags such as all the company’s BBB complaints, he decided to create a website and post what he was uncovering about Premium Home Service and its elusive owner, Yosef Bernath.

“I was quite surprised how quickly people started reaching out to me,” he said.

From upset fellow customers to company insiders, information poured in.

The website, premiumhomeservice.info, quickly became a repository exposing PHS’s alleged methods, fake home repair businesses, made-up addresses and overseas call center.

“It was really quite a sophisticated operation,” said Edmonson.

Despite eventually getting a refund from PHS, he’s refused to take down his website.

“Certainly, I would plan to keep the website up until the business is either shut down or goes legitimate,” Edmonson said. He told KARE 11 he was contacted a few months ago by federal investigators interested in what he’d uncovered.

No matter what government investigators decide to do, it’s too late for Arney Plumbing.

The months of lost business proved too much, and he decided to shut down his business.

The Google listing for Arney Plumbing now reads, "permanently closed."

PROTECTING YOURSELF

Here are some recommendations for consumers about how to avoid phantom businesses.

Check the Minnesota Secretary of State’s online look-up service to see if they’re registered to do business.

Verify contractor’s licenses, bonds, certifications and registrations with the Minnesota Department of Labor and Industry.

Drive to the office address that’s listed on the internet to verify there’s a business there.

For small business owners: 

Make sure to claim your Google Business listing. Here’s how.

Protect your listing with a strong password to secure it.

SOURCE: KARE 11