Kentucky attorney general files suit against Lexington Blue and its owner
Kentucky Attorney General Russell Coleman on Friday filed a civil lawsuit against failed roofing company Lexington Blue and owner Brad Pagel.
Coleman’s office filed the lawsuit in Fayette County.
It comes just days after the Herald-Leader published a series of stories that spotlighted the growing frustration of homeowners who accused Pagel and his company of defrauding them of thousands of dollars in deposits for roofing repairs never done.
According to the lawsuit, “at least 200–300 consumers, and likely more, have paid large deposits for which Lexington Blue has never provided any products or services.”
In 2024, Pagel’s company accepted $4.8 million in payments for 329 projects, “the majority of which appear unfulfilled.”
It is unclear where Pagel is. He announced on his Facebook page earlier this month that he had left Lexington.
Pagel has not responded to multiple requests by the Herald-Leader to comment.
Motion to freeze bank accounts
In a hearing before Fayette Circuit Court Judge Dianne Minnifield Friday afternoon, Coleman’s office asked for a temporary restraining order to stop Pagel and Lexington Blue from destroying any records.
The AG’s office asked to be allowed to entered Lexington Blue’s offices, including the main one on Pasadena Drive, to seize records.
Coleman also asked that the judge order Lexington Blue to stop any attempt at doing business. Although the company says it has closed, customers say they are still getting emails about their “upcoming roofing project.”
Minnifield also was asked to freeze the company’s bank accounts, as well as Pagel’s and those of Alex Southwell, a Lexington Blue employee who was listed as a partner in what Coleman’s office called a “shell company.”
The motion also asked that Pagel and Lexington Blue “identify all assets and make an accounting of their present financial condition.”
Coleman’s office asked for a receiver to be appointed to take over all of the roofing company that closed its doors April 26.
A spokesman in the attorney general’s office would not comment Friday about the lawsuit.
“This (temporary restraining order) and the appointment of a qualified receiver are necessary to prevent further dilution of assets, to ensure that Lexington Blue does not continue to defraud consumers and endanger consumers or destroy and conceal assets and records,” Coleman’s office said in its motion.
Pagel disguised payments as consulting fees
According to the documents, Pagel has been moving money from Lexington Blue accounts into shell companies, including $69,900 transferred to Pagel and his Wide Awake Consulting company from Oct. 31, 2024, to Feb. 28, 2025.
Emily Rees, former Lexington Blue marketing manager who worked there for nearly a year before she was fired in March 2025, said Pagel directed her “to create fake positive online reviews to combat negatives reviews.”
She also said in a sworn statement that senior managers told her Pagel “used Lexington Blue’s operating funds, which were collected from consumer deposits, for personal use and expenditures unrelated to work for which consumers paid, diverted funds to other companies, such as Lean Dad and Wide Away, disguising them as consulting fees.”
Other shell companies, according to the attorney general, included Lexington Blue Lexington, Lexington Blue Louisville, Lexington Blue Cincinnati, Lexington Blue University, Lean Dad and The GroundzKeeper, which lists Southwell as co-owner.
Attempt to shift liability
Pagel announced Lexington Blue’s closure abruptly on April 26 in an announcement to customers, saying that a subcontractor, Skyline GC, would take over open accounts.
Last week, according to filing on Friday, Pagel’s attorney turned over “an incomplete copy of its general ledger maintained on its accounting software. The ledger revealed that between Jan. 2 and April 24, 2025, Lexington Blue accepted $816,932.80 in deposits from 68 new customers, including a deposit received on the very day it attempted to offload its open contracts to Skyline GC.”
According to documents filed in the lawsuit, Lexington Blue attempted to sell 278 outstanding contracts for Skyline owner Cesar Gutierrez for one penny each, about $2.78 in total, with the agreement specifying that Skyline would “assume full responsibility” and that Lexington Blue would have no further liability to the homeowners.”
The contract was signed by Southwell.
What Coleman’s suit requests
Coleman is asking for the court to require Pagel, Lexington Blue and Southwell be required to “disgorge the ill-gotten funds,” as well as pay penalties of $2,000 for every violation of the Kentucky Consumer Protection Act, or up to $10,000 per defrauded customer was 60 or older and “substantially more vulnerable than other members of the public.”
Complaints about Lexington Blue date back at least to 2021 under then-Attorney General Daniel Cameron, according to the documents filed with the lawsuit.
According to the lawsuit, Coleman’s office has continued to receive complaints from former Lexington Blue customers — 59 since March 25, when the attorney general originally subpoenaed the company’s records — with more coming forward.
And efforts to recruit more customers and pull in more money continued through at least the spring.
Rees said in her statement that the company had implemented at Pagel’s behest something called “Project 485.”
It said “staff were required to revisit consumers, make an excuse to reinspect the roof when re-inspection was unwarranted, and demand additional funds for the deposit in order to begin work if an initial deposit had not previously been paid.”
This story was originally published May 30, 2025 at 4:48 PM.
