Win for Commission in DOJ’s anti-elder-fraud efforts
The complaint targeted defendants who allegedly ran more than 30 companies that sent deceptive award mailers to elderly consumers. The allegations ranged from newsletter solicitations disguised as prize announcements to more elaborate fare: One allegation claimed that substantial cash prizes were promoted to consumers who answered a simple math question and paid a registration fee ‒ but when consumers responded to the original offer, they were treated to another, unannounced round of questions and fees. And so on.
The final math puzzle that awarded the prize, however, was an intricate task that few people could solve ‒ a strategy that the defendants hoped would prove as addictive (and as profitable) as a video game.
The Commission claims that the pair, Kevin Brandes and William Graham, doing business as Next-Gen Inc. and countless other corporate names, defrauded consumers to the tune of $100-plus million over the past five years.
After the FTC (working with the Missouri attorney general’s office) dropped the hammer on the Next-Gen family, the pair settled. In addition to a whopping $21 million fine, the defendants were required to liquidate personal possessions, including two luxury vacation homes, a yacht and a Bentley automobile.
Interestingly, the defendants are banned from future prize promotions, except “a free raffle, drawing, or similar prize giveaway for which an individual enters or signs up in person.”