There are tons of reasons why something like that wouldn't work.
Firstly FG might be a server that has been live since 2007 but it doesn't mean it's an official international GunZ server generating amazing amount money, with that being said, 500$ tournament is not happening.
Secondly, it's already obvious enough that the usage of VPN's leads to a permanent ban, no need to even mention that in the thread and lastly, with the cheats that have been going on, I highly doubt anyone would love to host a tournament where people would surely attempt to cheat just to win the money.

Small 2v2/3v3 tournaments with 50-100$ (at most) are still possible but those are hosted only on special occasions.