Las Vegas Sun

March 28, 2024

Court upholds $17.3 million penalty in sweepstakes case

CARSON CITY — A federal appeals court today upheld a $17.3 million penalty imposed in Las Vegas against a man accused of running a mail-order sweepstakes scheme that bilked consumers in five states.

The 9th U.S. Circuit Court of Appeals backed the Federal Trade Commission, which accused Glen Burke of violating an injunction to stop operating a sweepstakes business that misled consumers into believing they could receive life-changing prizes by making certain payments.

Burke’s company, American Health Associates, would contact consumers, promising them a new car, boat, jewelry, vacations or large sums of money, officials alleged. But the consumer would have to contribute $300 to $500 to buy vitamins, officials said.

Telemarketers assured consumers the prizes were worth more than the payments to the Las Vegas firm; but the consumers only got the pills and no prize, officials said.

The company, according to the FTC, pressed consumers later to send $1,000 or more for even larger prizes.

The FTC obtained its first order against Burke in 1996. Burke agreed to a permanent injunction to stop the practice in 1998. But he ignored the order and hid the money he received in off-shore banks, according to the FTC. He was cited for contempt in continuing the practice.