Business

KC sweepstakes that no one ever won will forfeit $30 million for swindle

Tricks of the trade, or tools of business?

No one has ever won the million-dollar grand prize, and now sweepstakes and mail-in contest companies tangle with the Federal Trade Commission. These are the techniques that the government says help deceive consumers.
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No one has ever won the million-dollar grand prize, and now sweepstakes and mail-in contest companies tangle with the Federal Trade Commission. These are the techniques that the government says help deceive consumers.

A Kansas City sweepstakes scam that never had a winner now has its latest loser: The group behind the operation will forfeit $30 million to the Federal Trade Commission and the Missouri attorney general to settle a civil lawsuit.

The FTC announced that Next-Gen and a series of affiliates are now banned from operating in the prize promotion business and will turn over millions in assets that include luxury vacation homes, a yacht and a Bentley automobile in what the consumer watchdog agency calls the largest forfeiture order obtained against a bogus sweepstake operator.

The full settlement amount is $114.7 million, but the FTC agreed to suspend the total amount as long as the defendants forfeit $30 million in cash and assets.

The FTC sued Next-Gen and others in 2018, accusing the companies of targeting seniors with deceptive mail pieces that told its recipients that they had or probably would win up to $2 million, so long as they sent in a fee of anywhere between $9 and $140.

Other mail pieces invited recipients to play what was described as “games of skill” for a fee that were actually difficult math problems that the FTC said few, if anyone, could solve.

The lawsuit alleged that Kansas City businessmen Kevin Brandes, William Graham and Charles Floyd Anderson were behind the swindle that started in 2013.

The settlement agreement has a court-appointed receiver in charge of winding down the companies and liquidating assets belonging to the defendants in order to obtain proceeds to then send to victims of the scam.

Steve Vockrodt is an award-winning investigative journalist who has reported in Kansas City since 2005. Areas of reporting interest include business, politics, justice issues and breaking news investigations. Vockrodt grew up in Denver and studied journalism at the University of Kansas.

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