Lottery fraud

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Forged lottery ticket from 1936, displayed in the Norwegian National Museum of Justice, Trondheim Justismuseet. Counterfeit money etc. in Norway. Forged lottery ticket. Forfalsket lodd i Pengelotteriet 1936. Norwegian National Museum of Justice, Trondheim 2019-04-10 DSC03256.jpg
Forged lottery ticket from 1936, displayed in the Norwegian National Museum of Justice, Trondheim

Lottery fraud is any act committed to defraud a lottery game. A perpetrator attempts to win a jackpot prize through fraudulent means. The aim is to defraud the organisation running the lottery of money, or in the case of a stolen lottery ticket, to defraud an individual of their legitimately won prize.

Contents

Several common techniques are used, including using a forged or altered lottery ticket to claim a prize, or presenting a genuine, stolen ticket to claim a prize through misrepresentation. There are also cases of insider fraud, where employees or agents involved in the lottery have exploited their position to fraudulently claim prizes for themselves, such as tampering with the lottery draw process itself. In many countries, players can present their lottery tickets in person at retail outlets to check for winning numbers at the point of sale; cases have emerged of retailers failing to inform customers of their winnings and then claiming the prizes for themselves.

An alternative form of lottery fraud, commonly known as a lottery scam, takes the form of informing an individual by email, letter or phone call that they have won a lottery prize. The victim is instructed to pay a fee to enable the non-existent winnings to be processed. This type is a form of advance-fee fraud and a common email scam. [1] [2]

Noted cases

Monroe County police officers examining fake Cuban lottery tickets (c.1960) MM00038365x (9274609137).jpg
Monroe County police officers examining fake Cuban lottery tickets (c.1960)

A number of high-profile cases have emerged of lottery fraud around the world. A counterfeit ticket scandal was recorded in 1913-1914 which involved fake tickets from the Cuban lottery being sold in Puerto Rico, South Florida and the West Indies. [3] The fraud was perpetrated by Cuban officials inside the lottery. [4] During the 1960s, Colombian drug lord Pablo Escobar's early petty criminal activities included selling fake lottery tickets. [5] In 1999, a case of draw tampering emerged in Italy when the balls of the national Lotto were treated with varnish or heated. The blindfolded children who drew the winning numbers were then secretly instructed to pick preselected numbers by feeling for treated balls. [6] [4]

Canada

Between 1999 and 2006, the Ontario Lottery and Gaming Corporation (OLG) was subject to widespread retailer fraud. Authorities noticed that an improbably large number of lottery retailers in Ontario were winning major prizes, from $50,000 to $12.5 million. Evidence emerged that certain retailers were failing to inform customers of their winnings when they presented their lottery tickets in-store, and then fraudulently claiming prizes for themselves. [7] An investigation found evidence of widespread insider fraud among lottery retailers, including collusion with employees and family members. Four OLG officials were fined and dismissed. [4]

United States

In 1980, Nick Perry, TV host of the Pennsylvania Lottery, was at the centre of the 1980 Pennsylvania Lottery scandal, a fraud that involved creating replicas of the official ping-pong balls used in the Pennsylvania Lottery machines. The specially weighted balls ensured that limited combinations of numbers were likely to be drawn. Perry's accomplices then purchased a large number of tickets around the state corresponding to the predicted draw results, enabling them to claim approximately $1.8 million in prize money. Suspicions were aroused when authorities noticed that a large number of tickets were purchased for the eight possible combinations. On 20 May 1981, Perry was convicted of criminal conspiracy, criminal mischief, theft by deception, rigging a publicly exhibited contest and perjury, and was sentenced to seven years in prison. His accomplices were also tried and convicted. [8] [9] A fictionalized version of the scandal was the basis of the screenplay for the 2000 film Lucky Numbers .

In 2010, in the Hot Lotto fraud scandal, Eddie Raymond Tipton, former information security director of the Multi-State Lottery Association (MUSL) (which also controls the Powerball game), rigged a random number generator to defraud the Hot Lotto lottery game of $14.3 million. On 20 July 2015, Tipton was found guilty on two counts of fraud and sentenced to ten years' imprisonment. [10] [11] Subsequent criminal investigations revealed that Tipton had also rigged other state lotteries: the Colorado Lottery in 2005 ($568,990 jackpot prize paid to Tipton's brother Tommy); the Wisconsin Lottery in 2007 ($783,257 prize paid to Tipton's accomplice); and the Oklahoma Lottery in 2011 ($1.2 million prize). Tipton was tried again in 2017 and sentenced to 25 years in prison. [12] [13]

United Kingdom

In 2009, a couple found a National Lottery ticket on the floor of a supermarket in Swindon. The ticket bore winning numbers and the couple claimed £30,000 in prize money. The woman who bought the ticket had retained her receipt as proof of purchase. The couple who found the ticket were charged with theft and making a false representation, and received an 11-month suspended sentence. [14] [15]

Several cases of insider fraud by retailers have been uncovered by investigators. In 2011, a shopkeeper in Watton, Norfolk retained a winning lottery ticket and later claimed the £156,000 prize herself. She and her husband were later jailed for 14 months. [16] [14] In 2012, an Oldham newsagent falsely told a woman that her lottery ticket had won nothing and then claimed the £1 million prize for himself. He was sentenced to 30 months in prison. [14] In Gravesend, another newsagent falsely claimed an £80,000 with a lottery ticket purchased by a customer, and was given a non-custodial sentence. [14] [17]

In 2009 an employee of Camelot — the company that operates the UK National Lottery — conspired with a member of the public, Edward Putman, of Kings Langley in Hertfordshire, to claim a jackpot prize using a bogus ticket. The employee, who worked in Camelot's fraud department, found a way to forge lottery tickets bearing winning numbers. Putman was initially prosecuted in July 2012 for benefit fraud after failing to declare lottery winnings of nearly £5 million whilst in receipt of welfare benefits. [18] Although police did not have enough evidence to bring a prosecution at the time, the case was investigated by the Gambling Commission in December 2016, who found that Camelot had breached the terms of its operating licence in failing to investigate the veracity of the prize claim before paying out and fined Camelot £3 million. [19] The case was subsequently investigated further and in October 2019 Putman was jailed for 9 years for defrauding the National Lottery of £2.5 million. [20] [21]

China

In the 2004 Chinese lottery scandal, a contractor at the Shaanxi Provincial Sports Lottery Centre in Shaanxi Province attempted to claim a prize of a new BMW car using a fake lottery ticket. [22]

In 2005, a lotto retailer in Anshan, Liaoning Province exploited a flaw in a lottery draw process that allowed him to continue to sell lottery tickets up to five minutes after the winning numbers had been announced. He bought a ticket with winning numbers and claimed a prize of $3.76 million, but eventually he was caught and sentenced to life imprisonment. [4] [23]

Lottery fraud has featured in films, television productions, and literature. David Baldacci's 1997 novel The Winner follows an impoverished young woman who is approached by a mysterious man that offers to arrange for her to win a $100,000,000 national lottery on the condition that she leaves the United States and never returns. The 2000 film Lucky Numbers depicts a TV weatherman, Russ Richards (John Travolta), who rigs the Pennsylvania Lottery in a story inspired by the 1980 Pennsylvania Lottery scandal. [24] In Class Warfare (2001), two high school students plot to murder a classmate to gain possession of his winning lottery ticket. [25] In Ridley Scott's 2003 film Matchstick Men, con artist Roy Waller (Nicolas Cage) teaches his daughter how to con a woman into believing she has won the lottery, and she shares her expected winnings with them. [26] A 2011 episode of the BBC TV documentary series The Real Hustle , a group of scammers pretend to be a lottery syndicate who have won a lottery. They persuade a member of the public to cash the ticket for them with a promise of a share in the prize pool. [27]

Related Research Articles

<span class="mw-page-title-main">Lottery</span> Gambling which involves the drawing of numbers at random for a prize

A lottery is a form of gambling that involves the drawing of numbers at random for a prize. Some governments outlaw lotteries, while others endorse it to the extent of organizing a national or state lottery. It is common to find some degree of regulation of lottery by governments. The most common regulation is prohibition of sale to minors, and vendors must be licensed to sell lottery tickets. Although lotteries were common in the United States and some other countries during the 19th century, by the beginning of the 20th century, most forms of gambling, including lotteries and sweepstakes, were illegal in the U.S. and most of Europe as well as many other countries. This remained so until well after World War II. In the 1960s, casinos and lotteries began to re-appear throughout the world as a means for governments to raise revenue without raising taxes.

<span class="mw-page-title-main">Mega Millions</span> American multi-jurisdictional lottery game

Mega Millions is an American multijurisdictional lottery game; as of June 30, 2023, it is offered in 45 states, the District of Columbia, and the U.S. Virgin Islands. The first Mega Millions drawing was in 2002. What is now Mega Millions initially was offered in six states; the logo for all versions of the game following the retirement of The Big Game name featured a gold-colored ball with six stars to represent the game's initial membership, although some lotteries insert their respective logos in the ball.

This is a collection of the largest prizes/jackpots awarded in various lotteries.

<span class="mw-page-title-main">Camelot Group</span> Operator of the UK National Lottery

The Camelot Group is the operator of the UK National Lottery whose current franchise period started in 2009 and runs until February 2024. It has also operated the Illinois State Lottery in the state of Illinois in the United States since 2018. The Camelot Group companies, of which Camelot UK Lotteries Limited is the UK National Lottery operating subsidiary, are owned by the holding company Premier Lotteries Investments UK Limited, whose ultimate parent is the Ontario Teachers' Pension Plan, a Canadian investment fund.

<span class="mw-page-title-main">Email fraud</span> Deception through email, made for personal gain or to damage another individual

Email fraud is intentional deception for either personal gain or to damage another individual by means of email. Almost as soon as email became widely used, it began to be used as a means to defraud people. Email fraud can take the form of a "con game", or scam. Confidence tricks tend to exploit the inherent greed and dishonesty of its victims. The prospect of a 'bargain' or 'something for nothing' can be very tempting. Email fraud, as with other 'bunco schemes,' usually targets naive individuals who put their confidence in schemes to get rich quickly. These include 'too good to be true' investments or offers to sell popular items at 'impossibly low' prices. Many people have lost their life savings due to fraud.

<span class="mw-page-title-main">Lottery scam</span>

A lottery scam is a type of advance-fee fraud which begins with an unexpected email notification, phone call, or mailing explaining that "You have won!" a large sum of money in a lottery. The recipient of the message—the target of the scam—is usually told to keep the notice secret, "due to a mix-up in some of the names and numbers," and to contact a "claims agent." After contacting the agent, the target of the scam will be asked to pay "processing fees" or "transfer charges" so that the winnings can be distributed, but will never receive any lottery payment. Many email lottery scams use the names of legitimate lottery organizations or other legitimate corporations/companies, but this does not mean the legitimate organizations are in any way involved with the scams.

<span class="mw-page-title-main">1980 Pennsylvania Lottery scandal</span> Rigging of The Daily Number so certain balls will be drawn

The 1980 Pennsylvania Lottery scandal, colloquially known as the Triple Six Fix, was a successful plot to rig The Daily Number, a three-digit game of the Pennsylvania Lottery. All of the balls in the three machines, except those numbered 4 and 6, were weighted, meaning that the drawing was almost sure to be a combination of those digits. The scheme was successful in that 666 was drawn on April 24, 1980; however, the unusual betting patterns alerted authorities to the crime. The chief conspirators were sent to prison, and most of the fraudulently acquired winnings were never paid out.

<span class="mw-page-title-main">Florida Lottery</span> Lottery of the U.S. state of Florida

The Florida Lottery is the government-operated lottery of the U.S. state of Florida. As of 2022, the lottery offers eleven terminal-generated games: Cash4Life, Mega Millions, Powerball, Florida Lotto, Pick 2, Pick 3, Pick 4, Pick 5, Fantasy 5, Cash Pop, and Jackpot Triple Play.

<span class="mw-page-title-main">Ontario Lottery and Gaming Corporation</span> Canadian provincial Crown corporation

Ontario Lottery and Gaming Corporation, known for corporate branding purposes simply as OLG since 2006, is a Crown corporation owned by the Government of Ontario, Canada. It is responsible for the province's lotteries, charity and Aboriginal casinos, commercial casinos, and slot machines at horse-racing tracks. It was created in April 2000 when the Ontario Lottery Corporation (OLC) was merged with the Ontario Casino Corporation (OCC), established in 1994. Prior to 2006, the combined entity was known in short form as the OLGC. OLG employs over 8,000 individuals throughout Ontario; 1,400 in Sault Ste Marie and the GTA offices. There are approximately 9,800 retailers operating more than 10,000 lottery terminals across the province.

<span class="mw-page-title-main">Hot Lotto</span> American lottery game

Hot Lotto was a multi-state lottery game administered by the Iowa-based Multi-State Lottery Association (MUSL), which is best known for operating the Mega Millions and Powerball games.

<span class="mw-page-title-main">Multi-State Lottery Association</span> Nonprofit that facilitates the operation of multi-jurisdictional lottery games in the US

The Multi-State Lottery Association (MUSL) is an American non-profit, government-benefit association owned and operated by agreement of its 34-member lotteries. MUSL was created to facilitate the operation of multi-jurisdictional lottery games, most notably Powerball.

<span class="mw-page-title-main">Connecticut Lottery</span>

The Connecticut Lottery Corporation, also called the CT Lottery, is the official lottery in Connecticut. It was created in 1971 by then-Gov. Thomas Meskill, who signed Public Act No. 865. The first tickets were sold on February 15, 1972. The Connecticut Lottery offers several in-house drawing games; Connecticut also participates in Mega Millions and Powerball; each are played in 44 states, the District of Columbia, and the U.S. Virgin Islands.

<span class="mw-page-title-main">Texas Lottery</span> Official lottery system of the U.S. state of Texas

The Texas Lottery is the government-operated lottery available throughout Texas. It is operated by the Texas Lottery Commission, headquartered in downtown Austin, Texas.

The Louisiana Lottery Corporation (LLC) is a government-run lottery that is used to generate revenue without increasing taxes. The proceeds of the Lottery go to the Minimum Foundation Program that funds public education in Louisiana. The daily activities involved with running the cooperation are handled by the president of the Louisiana Lottery Cooperation. The president is under the supervision of the Lottery's nine-member governing board of directors.

<span class="mw-page-title-main">Illinois State Lottery</span>

The Illinois State Lottery is an American lottery for the U.S. state of Illinois, operated by Camelot Illinois.

<span class="mw-page-title-main">Lotto America</span> American Lottery

Lotto America is an American multi-state lottery game that began in 2017. It is operated by the Multi-State Lottery Association (MUSL). It takes its name from the original Lotto America, offered from 1988 to 1992. Lotto America was re-launched by 13 state lotteries on November 12, 2017, as a replacement for the scandal-tarred Hot Lotto game; each of the 13 members of Lotto America offered Hot Lotto when it ended on October 28, 2017.

The National Lottery is the state-franchised national lottery established in 1994 in the United Kingdom. It is regulated by the Gambling Commission, and is currently operated by Camelot Group, to which the licence was granted in 1994, 2001 and again in 2007, but will be operated by Allwyn Entertainment Ltd from 2024.

<span class="mw-page-title-main">National Lottery (Ireland)</span> State lottery in Ireland

The National Lottery is the state-licensed lottery of Ireland. Established in 1986 to raise funds for good causes, it began operations on 27 March 1987 when it issued its first scratchcards. It launched the weekly drawing game Lotto the following year, holding the first draw on 16 April 1988. The National Lottery now offers Lotto and Lotto Plus draws on Wednesdays and Saturdays, EuroMillions and Plus draws on Tuesdays and Fridays, and two Daily Million draws each day. Its other games include televised bingo, Millionaire Raffles, and online instant-win games. The minimum age to play all National Lottery games is 18.

The Hot Lotto fraud scandal was a lottery-rigging scandal in the United States. It came to light in 2017, after Eddie Raymond Tipton, the former information security director of the Multi-State Lottery Association (MUSL), confessed to rigging a random number generator that he and two others used in multiple cases of fraud against state lotteries. Tipton was first convicted in October 2015 of rigging a $14.3 million drawing of MUSL's lottery game Hot Lotto. Eddie Tipton ultimately confessed to rigging lottery drawings in Iowa, Colorado, Wisconsin, Kansas and Oklahoma. Also involved in the scheme were his brother and former Texas justice of the peace Tommy Tipton, and Texas businessman Robert Rhodes. Eddie Tipton was sentenced to 25 years in prison.

<span class="mw-page-title-main">Rob Sand</span> American politician (born 1982)

Robert Sand is an American lawyer and politician who has served as the 33rd Iowa State Auditor since 2019. He is a member of the Democratic Party. Sand was assistant attorney general of Iowa from 2010 to 2017. In 2018, he ran for state auditor, defeating Republican incumbent Mary Mosiman. After considering a run for governor of Iowa in 2022, Sand opted to run for reelection. Sand was reelected in 2022, becoming the only statewide elected Democrat in Iowa.

References

  1. ↑ "How to identify and avoid hoax or fraudulent e-mail scams," Microsoft Archived January 18, 2008, at the Wayback Machine
  2. ↑ Schiller, Jon (2010). Financial Fraud. CreateSpace. p. 89. ISBN   9781450533430 . Retrieved 1 November 2019.
  3. ↑ "Counterfeit Lottery Tickets". The Cuba Review. New York: Munson Steamship Line. XII (1): 38. December 1913. Retrieved 3 November 2019.
  4. 1 2 3 4 Wile, Rob (3 August 2012). "The Most Famous Lottery Scandals Of All Time". Business Insider. Retrieved 2 November 2019.
  5. ↑ J.D. Rockefeller (17 March 2016). Cocaine King Pablo Escobar: Crimes and Drug Dealings. J.D. Rockefeller. pp. 3–. ISBN   978-1-5306-1889-7.
  6. ↑ "Italian investigators widen probe into rigged lottery drawings". CNN. 6 January 1999. Archived from the original on 17 October 2010. Retrieved 2 November 2019.
  7. ↑ Powell, Betsy; Brazao, Dale (20 December 2007). "Lotto winners discover $5.7M scam | The Star". Toronto Star. Retrieved 2 November 2019.
  8. ↑ Thornburgh, Dick (2003). Where the Evidence Leads: An Autobiography, Revised and Updated. University of Pittsburgh Pre. ISBN   9780822973881 . Retrieved 1 November 2019.
  9. ↑ Cuddy Jr., Jim (June 11, 1981). "Lottery TV Moved to Harrisburg". The Pittsburgh Press . Retrieved April 14, 2015.
  10. ↑ Rogers, Grant (June 29, 2017). "Tipton brothers plead guilty in Iowa lottery rigging scandal". Des Moines Register. Retrieved 2017-08-25.
  11. ↑ Clayworth, Jason (August 22, 2017). "Eddie Tipton sentenced in Iowa Lottery rigging case". Des Moines Register. Retrieved 2017-08-25.
  12. ↑ Rodgers, Grant (October 9, 2015). "Hot Lotto scammer accused of rigging other lotteries". Des Moines Register. Retrieved November 21, 2015.
  13. ↑ Forgrave, Reid (3 May 2018). "The Man Who Cracked the Lottery". The New York Times. Retrieved 6 November 2019.
  14. 1 2 3 4 Haworth, Jessica (29 January 2016). "What happens when you fake a lottery win? These are the people who tried". Daily Mirror. Archived from the original on 1 February 2016. Retrieved 1 November 2019.
  15. ↑ Roberts, Tom (24 July 2009). "Couple who found winning lottery ticket ordered to pay back prize money". The Guardian. Archived from the original on 1 November 2019. Retrieved 1 November 2019.
  16. ↑ "Newsagent stole winning £156,000 lottery ticket from pensioner". 20 March 2012. Archived from the original on 30 July 2017. Retrieved 1 November 2019.
  17. ↑ "Lottery Cheat Imran Pervais Escapes Jail Term". Sky News. Archived from the original on 1 November 2019. Retrieved 1 November 2019.
  18. ↑ Cockerell, Jennifer (3 July 2012). "Lottery winner rapist Edward Putman admits fraud". The Independent. Archived from the original on 23 October 2019. Retrieved 23 October 2019.
  19. ↑ Marston, Rebecca (16 December 2016). "National Lottery firm Camelot fined for £2.5m suspect ticket win". BBC News. Archived from the original on 17 December 2016. Retrieved 1 January 2017.
  20. ↑ "Conman jailed for £2.5m fake lottery ticket fraud". BBC News. 4 October 2019. Archived from the original on 23 October 2019. Retrieved 23 October 2019.
  21. ↑ "Man convicted over £2.5m National Lottery fake ticket fraud". The Guardian. 4 October 2019. Archived from the original on 5 October 2019. Retrieved 24 October 2019.
  22. ↑ "Lottery winner sold BMW, goes bush". Shenzhen Daily . 30 June 2004.
  23. ↑ "Man gets life for lottery ticket scam". Reuters. 6 November 2007. Retrieved 2 November 2019.
  24. ↑ Ebert, Roger (2002-12-02). Roger Ebert's Movie Yearbook 2003 . Andrews McMeel Publishing. pp.  373. ISBN   9780740726910. Lucky Numbers travolta film lottery.
  25. ↑ Fries, Laura (26 June 2001). "Class Warfare". Variety. Retrieved 2 November 2019.
  26. ↑ Raw, Laurence (2009-09-28). The Ridley Scott Encyclopedia. Scarecrow Press. p. 218. ISBN   9780810869523.
  27. ↑ "The Real Hustle Episode 6: New Recruits". The Real Hustle. Series Series 10. 11 December 2011. BBC. BBC Three . Retrieved 1 November 2019.
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