By Lookout Staff

March 16, 2010 -- The former store owner who collected money from customers for furniture he never delivered pleaded guilty this month to charges of false advertising and doing business without a license. Arman Hazarian was sentenced to four years probation and must pay $80,856 to the customers he deceived.

The Cozi Couch, located at Seventh Street and Wilshire Boulevard, went out of business last year. Dozens of customers had paid 100 percent down by cash or check for custom furniture on a promise that it would be designed and delivered at a later date.

The deliveries never occurred, according to the City Attorney’s Office. Similar complaints were also made regarding a Los Angeles Cozi Couch location.

“This case is a cautionary tale for consumers in two ways,” said Deputy City Attorney Adam Radinsky. “First, paying 100 percent down before an item or service is delivered is very risky. Second, paying by cash or check means that there’s no way to dispute the charges and get a refund if things go bad.”

Hazarian had furniture made and delivered to eight of the former customers to satisfy their complaint. Others will share the money from the fine. Those who paid by credit card were reimbursed by their credit card companies.

“Our primary goal has been to get the maximum possible value in the form of money and merchandise back to the former customers of Cozi Couch,” Radinsky said. “We are confident that this agreement resulted in the best outcome available to us for the former customers.”

Also as part of the plea agreement, Hazarian must perform 200 hours of community service. His three managers – Cori Iturribarria, Jaime Seoane, and Nelson Freytes – pleaded No Contest to operating without a business license. They will be placed on probation and must perform community service.