‘Picture of deception’: How $100 million sweepstakes case put two KC attorneys on trial | Opinion
An interesting fact about C. Floyd Anderson is that he once owned what is perhaps the most recognizable home in all of Kansas City: the Mack B. Nelson mansion.
That’s the one set impossibly far back from Ward Parkway on the southwest corner where it meets 55th Street. It looks more like a museum than a house, and in fact the architect who designed it also designed what is now the Kansas City Museum.
Anderson bought it for about $2 million in the 1990s. He made his stack owning nursing homes, a bank and direct-mail companies — though that latter description is a polite way of putting it.
Those companies, called Opportunities Unlimited Publications and Contest America Publishers, sent out mass mailers of puzzle contests and sweepstakes of questionable legitimacy. Over time, complaints about the mailers began to pile up from recipients from all across the country who said they’d been deceived about their odds and likelihood of winning. In one case cited by regulators in 1993, an elderly Topeka woman had spent $75,000 chasing one of Anderson’s “prizes.”
Between 1993 and 2002, officials in multiple states — Missouri, Kansas, Minnesota, Florida, Arizona, West Virginia, Connecticut — took action against Anderson’s companies.
None of it really derailed the enterprise. Anderson paid fines and kept things moving. He did eventually sell the Ward Parkway mansion — but only to buy an even bigger house in Hallbrook. He later bought a $5 million home in Hawaii. Florida, Missouri and Arizona in the 2010s reopened cases against Anderson’s companies for violating their previous settlement agreements. Then, in 2018, the feds got involved.
That year, the Federal Trade Commission filed suit against Kevin Brandes and William Graham, Anderson’s stepson and son-in-law, to whom he’d sold the businesses in 2015. Anderson was later added as an additional defendant.
The charges were familiar.
“These defendants tricked millions of people — many of them older adults — into paying money to collect prizes that never materialized,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection.
Anderson, Brandes and Graham had collected in excess of $100 million from duped consumers since 2013, the feds said. According to court filings in that case, nobody had ever won the million-dollar sweepstakes they advertised.
A settlement was reached in late 2018. It imposed a $114 million judgment on Anderson, Brandes and Graham, though it only required the men to forfeit about $22 million plus some real estate holdings.
But that was not the end of the case. The deal hinged on the accuracy of their financial disclosures. Four years later, those disclosures would become the focus of separate cases involving two high-profile Kansas City attorneys.
Who is Pete Smith?
From 1992 to 2015 Anderson’s lawyer was Pete Smith, the chairman and chief executive officer at the law firm McDowell Rice Smith & Buchanan P.C., headquartered on the Country Club Plaza.
A trial lawyer with more than half a century in practice, Smith has often represented clients in high-risk corners of the economy. That list includes the payday lending moguls Scott and Joel Tucker, both currently serving federal prison sentences for a massive fraud scheme. In the Scott Tucker case, a federal judge at one point ordered Smith’s firm to turn over client files after finding probable cause that his legal work had been used in furtherance of crime or fraud — one of the narrow exceptions that can pierce attorney-client privilege.
Smith was not just Anderson’s counsel. The two men have been close friends and business partners for decades. Their bond “reaches far outside the typical attorney-client relationship,” U.S. District Court Judge Roseann Ketchmark wrote as part of an order issued March 16.
That order found Smith, who is 80 years old, guilty of criminal contempt related to his representation of Anderson. (Anderson was also found guilty.) Smith was not charged with the underlying fraud of the sweepstakes businesses. He was charged because of what he did afterward. That included:
- Draining the bank account of a joint business venture he owned with Anderson, then concealing the venture entirely from the required financial disclosures he submitted weeks later.
- Providing an “incomplete and inaccurate” account of a property swap with Anderson involving a Puerto Vallarta condominium, which the court found “failed to sufficiently disclose” key details. Smith changed the registered agent on the entity just before submitting disclosures to the FTC.
- Withholding a two-page English-language agreement — which Smith himself had drafted — that would have directly answered the FTC’s questions about the property swap, and instead producing 93 pages of Spanish-language Mexican trust documents. The judge found Smith’s conduct to be “unresponsive, confusing, and deliberately obscured his connection” to the property swap.
*Being either willfully blind to, or knowingly silent about, a “plainly fraudulent” $495,000 Corvette transaction backdated by his law partner, Joe Harter, to two days before the FTC case was filed. Ketchmark found that Smith’s failure to uncover or disclose the deal reflected a reckless disregard of his professional duties, especially given his admission at trial that he still would not have reported it even had he known. (Harter died last year.)
Smith’s firm said in a statement that it was “surprised and disappointed” by the guilty verdict, described Smith as an accomplished lawyer with a distinguished career, and said it “strongly disagrees with the decision.”
The firm declined further comment, citing the pending status of the case. The deadline to file an appeal has not yet arrived, and Smith has not been sentenced. Prosecutors previously said they would not seek more than six months in jail or a $5,000 fine in the event of a guilty verdict at Smith’s bench trial.
Whether Smith will be disbarred is up to the Missouri Supreme Court, following any action brought by the Office of Chief Disciplinary Counsel, which investigates allegations of misconduct by lawyers. The office does not comment on pending matters.
John Kennyhertz dodges a bullet
Also ensnared in the government’s cleanup of the sweepstakes case was John Kennyhertz, a well-known Kansas City attorney and managing partner of the firm Kennyhertz Perry.
Prosecutors’ theory against him was narrower than the one it brought against Smith, but still serious.
Kennyhertz represented Anderson’s son-in-law, William Graham, one of the principal defendants in the sweepstakes case. In a 2023 petition filed the same day as the one against Smith, the government argued that Kennyhertz had violated a federal court order freezing assets tied to the operation.
At the center of the dispute was money that Kennyhertz’s firm was managing on behalf of its clients — receiving payments each month and passing them along to various parties connected to the business. When the court ordered all assets frozen in July 2018, prosecutors argued Kennyhertz should have stopped the flow of money or otherwise complied with the terms of the order.
Instead, he kept the payments moving — hundreds of thousands of dollars in total — including into bank accounts the court had frozen, and fees that went directly to his own firm.
That was enough for prosecutors to pursue a criminal contempt case, an extremely rare step against a lawyer.
But unlike Smith, Kennyhertz beat his case.
In a 2025 ruling following a bench trial, U.S. District Judge Roseann Ketchmark found him not guilty, concluding the government failed to prove Kennyhertz willfully violated the order.
That is not the same thing as saying nothing happened. It did — enough to trigger a federal prosecution, a bench trial, and the real possibility of jail time. Kennyhertz did not respond to a request for comment.
Legal accountability
I called several attorneys for this story. None of them wanted to talk on the record about Smith or Kennyhertz’s conduct. There’s not a lot of upside in it.
The closest thing to a blunt assessment came from the one person who was legally required to weigh in.
“When an attorney sanitizes, rather than organizes, financial records for court-ordered disclosure, it is unprofessional, unethical…and serves as a poor role model for the legal community,” Ketchmark wrote in her ruling against Smith, adding that Smith’s conduct amounted to a “picture of deception.”
When lawyers push the boundaries of acceptable conduct, they are policed by other lawyers. It’s a club — and in a lot of ways, it’s too clubby.
On one hand, the law is a specialized profession, full of rules and gray areas that only practitioners really understand. You want people inside it who take those obligations seriously, who see themselves as stewards of the system, not just participants in it. That’s part of what gives the profession its standing in the first place.
But the system of accountability is opaque. You can find out through the Office of Chief Disciplinary Counsel that someone was disciplined, even disbarred. But it’s often difficult to learn exactly why. Much of the machinations happen out of view. It is not even a foregone conclusion that Smith will be disbarred. In Missouri, many disciplinary cases end in private admonitions or short suspensions, often with little public detail about the underlying conduct.
Three years ago, I wrote about attorney Charles Renner, who was hired as outside counsel to guide Kansas City through the process of choosing who would build the new KCI airport. A three-judge panel later found that Renner worked behind the scenes to steer the deal away from Burns & McDonnell — an engineering outfit Renner’s own law firm had ties to — and toward Edgemoor, a company he’d previously done business with. The judges determined Renner’s legal misconduct cost Burns & McDonnell the contract and awarded the firm $62 million in damages.
Renner is still practicing law. He’s a member of the Kansas City Election Board. I saw him on TV the other day. Channel 2, actually. He was in City Hall chambers.
This story was originally published March 26, 2026 at 2:20 PM.
