A federal judge has frozen the assets of a group of Kansas City businesses and their owners that were involved in million-dollar sweepstakes prizes and mail-in contests that no one ever won.
The Federal Trade Commission and Missouri Attorney General Josh Hawley filed a lawsuit in February seeking to freeze the assets of Kevin Brandes and William Graham and their companies: Next-Gen Inc., Opportunities Unlimited Publications, Westport Enterprises and others.
Next-Gen and Westport Enterprises sent out sweepstakes, some of which promised winnings of up to $2 million. None of those winnings were claimed.
Opportunities Unlimited Publications and Contest America Publishers ran mail-in contests with unsolvable puzzles.
Regulators said in February that the two men and their companies deceived consumers out of $110 million since 2013.
The owners’ attorneys argued that the government overreached, acting on a limited supply of complaints in comparison to the millions of mailings the companies have sent out over the years. They challenged the government’s request to seize their business and personal assets, saying they would be unable to defend these claims without them.
In the freeze order, U.S. District Chief Judge Greg Kays wrote that prosecutors had “established a likelihood of success in showing” three key charges in the complaints against them:
- The men and companies had sent deceptive sweepstakes notices, games of skill and newsletter subscriptions through the mail.
- The mailings “gave consumers the false impression that they have won, or are likely to win” a prize and consumers had to pay fees for the prizes.
- The “immediate and irreparable harm” will come from continued violations.
Kays transferred control of the companies, the defendants’ assets and all records over to a temporary receiver. The receiver will have control over operations in Lee’s Summit, North Kansas City, Overland Park and Bonner Springs.
The companies said in court filings that they voluntarily stopped new mailings, but plan to continue to carry out already active contests and sweepstakes.
Read more: Kansas City Star