CHICAGO (Legal Newsline) - Illinois Attorney General Lisa Madigan filed a lawsuit on Wednesday against a Chicago company that allegedly targeted local businesses with phony advertisement solicitations in popular phone book directories.

Madigan's lawsuit, filed in Cook County Circuit Court, alleges that Julia Drahos and Lena Lockwood operated Yellow Page Quick Reference Index, a dissolved Illinois corporation, selling fictitious advertising space for local directories such as Dex to local businesses.

"Small businesses are already struggling in this difficult economy," Madigan said. "The last thing business owners need is to be targeted for false advertising opportunities that clearly have no benefit."

Drahos and Lockwood allegedly charged businesses between $250 and $450 for advertisements that never materialized, which is a violation of the Consumer Fraud and Deceptive Business Practices Act. The defendants allegedly locked consumers into long-term contracts and refused to cancel the contracts upon request. Businesses in Winnebago, Kendall, Kankakee, Will and Cook counties reported being victimized in the alleged scheme, resulting in at least $10,000 in total losses.

The lawsuit seeks to ban the defendants from operating or owning an advertising company in Illinois and restitution for affected consumers. The suit also seeks a civil penalty of $50,000 and additional penalties of $50,000 for violations found to be committed with the intent to defraud and for those committed against a person 65 years or older.