State Auditor To Investigate Potential Pennsylvania Lottery Fraud

Written By Kevin Shelly on December 6, 2019

Pennsylvania’s two-term Auditor General Eugene DePasquale plans a performance audit of the state’s Lottery. That’s a bureau within the state’s Revenue Department.

The review will focus on repeat winners. The probe will also review whether the Pennsylvania Lottery is doing enough to prevent fraud by winners and retailers.

The lottery just finished a record-breaking year.

Fraud found elsewhere with a ‘high-volume’ lottery winner

DePasquale’s announcement came this week after a collaborative series of news stories across several states on “high-volume” lottery winners.

The stories by four newspapers, including The Patriot-News in Harrisburg Pennsylvania, along with the assistance of Columbia University’s Graduate School of Journalism, uncovered troubling and sometimes criminal activities.

In the worst case, a Boston-area resident bought winning tickets from other lottery players at a discount to help them avoid paying taxes. He cashed in more than 7,300 tickets worth $10.8 million.

The scheme also involved the cooperation of convenience stores that sold the tickets and paid out winnings. A judge convicted Clarence Jones in September. His collaborators got probation after cooperating.

That case drew the attention of DePasquale.

“When this issue first surfaced several years ago, I warned that I would be monitoring the situation. Some lotteries have taken major steps to crack down on suspected fraudulent claims and I want to ensure that the Pennsylvania Lottery is doing everything possible to prevent and stop any fraud.”

Triple Six Fix Lottery scam still on Pennsylvanian’s minds

Lottery fraud has a history in the Keystone State. Pennsylvania is home to the largest US lottery scandal. It is best known as the “Triple Six Fix” scam after the winning combo of 666.

A host of the 1980 live drawing broadcast show and also a lottery official were convicted the following year. They used weighted ping pong balls to juice the crooked game. The drawing had a then-record $3.5 million potential payout, the equivalent of more than $10 million today.

PA Lottery integrity is paramount

DePasquale, a Democrat from York who has said he intends to run for Congress, explained his plans for the audit:

“My goal is to protect older adults who rely on Lottery-funded programs. If players or retailers are committing fraud, the Pennsylvania Lottery has an obligation to catch them and take action to protect the integrity of the Lottery Fund.”

DePasquale said the examination aims to evaluate the effectiveness of the department’s regulations, policies, and procedures.

Seniors benefit

“Last fiscal year, Pennsylvania Lottery players bought $4.5 billion in games and claimed more than $2.9 billion in prizes,” DePasquale said. “Seniors, lottery players, and the general public deserve to know if every dollar of those prizes was claimed in accordance with the law.”

The PA Lottery provides more than $1 billion in proceeds annually to support benefits for the state’s senior citizens. Lottery-funded programs include price breaks on prescription drugs, property tax rebates, and home care services.

DePasquale has also said his audit team will be looking at the selection and vetting of a vendor for the state’s terminal-based games and instant lottery tickets.

The Patriot-News reported the state has already spent $1.3 million to evaluate vendor bids and has not completed its selection for a contract valued at $1 billion.

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Kevin Shelly

Kevin C. Shelly is an award-winning career journalist who has spent most of his career in South Jersey. He's the former assistant city editor of The Press of Atlantic City, where he covered the casino industry and Atlantic City government as a reporter. He was also an investigative, narrative enterprise, and features reporter for Gannett’s Courier-Post.

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