Personal Finance

Kansas City area businesses ran jackpot scams, federal lawsuit alleges

A federal lawsuit said this final step in a math contest scam would find few, if any, players capable of solving it.
A federal lawsuit said this final step in a math contest scam would find few, if any, players capable of solving it. U.S. District Court

A network of Kansas City area businesses has "tricked consumers out of tens of millions of dollars" through jackpot and other schemes, according to charges brought by federal and Missouri officials.

"Deceptive mailers" sent throughout the United States and into Canada, the United Kingdom, France and Germany, drew in $110 million through fees ranging from $9 to $139.99, said a lawsuit in U.S. District Court in Kansas City.

Some mailers falsely congratulated recipients for having won $1,230,946, the Federal Trade Commission said in an announcement of its actions, and then asked for a fee to receive the jackpot.

Others pitched a jackpot game based on answering a simple math question but failed to disclose the contest involved multiple rounds. Each round required payment of a fee leading to "a final, complex puzzle that few people, if any, can solve," the FTC said.

One mailer purported to be a notification of a $1 million prize but was merely a newsletter subscription ad.

"Consumers who have paid the required fees do not receive the promised cash prizes," the suit said.

The lawsuit names Next-Gen Inc. and others at an address in North Kansas City as well as Westport Enterprises Inc. and others at addresses in Lee's Summit. It cited Kevin R. Brandes, president of Next-Gen and Westport, and William J. Graham, vice president of Next-Gen and Westport.

The companies operated with common ownership, officers, managers, employees and contractors and co-mingled their funds, the lawsuit said.

Missouri Attorney General Josh Hawley and the FTC seek temporary and permanent injunctions against the men and the companies as well as relief for consumers.

In its announcement, the FTC credited the Better Business Bureau of Greater Kansas City, the Kansas attorney general's office, and other agencies for their roles in the case.

Consumers have complained about Next-Gen on the area Better Business Bureau website for some time.

"BE VERY AWARE!! SCAM SCAM SCAM! They just keep asking me for more money but I won money! I truly don't understand how they still legal!" was posted on the bureau's website by J.B. in October 2016.

The lawsuit said the companies had taken in $110 million from the schemes since at least 2013.

Mark Davis: 816-234-4372, @mdkcstar