Florida Lottery shuts down 18 outlets in wake of Palm Beach Post probe


No more sales

The Florida Lottery stripped 18 stores of the right to sell lottery tickets, claiming fraudulent sales. The lottery began investigating after The Palm Beach Post identified inexplicable winnings among dozens of players, many of them store clerks or owners. These stores were banned:

  • Akel Market, 502 N.W. 6th St., Pompano Beach
  • Georgia Market, 1404 N.W. 6th Ave., Pompano Beach
  • Kwik Stop Food Store #4, 617 Hammondville Road, Pompano Beach
  • Midway Food Mart, 1200 W. Midway Road, Fort Pierce
  • Rainbow Food Mart, 8592 49th St., Pinellas Park
  • Park Street Gas Kwick, 5399 Park Street North, St. Petersburg
  • 49 St Mobil, 825 49th Street North, St. Petersburg
  • Central Ave Exxon, 5800 Central Avenue, St. Petersburg
  • Clearwater Sunoco, 11600 U.S. 19, North Clearwater
  • Mini Market, 7875 137th Street, Seminole
  • Bryan Dairy Rally, 7690 Bryan Dairy Road, Largo
  • Grocery Box, 448 S. Yonge Street, Ormond Beach
  • Crossroad Grocery, 401 N. U.S. 1, Ormond Beach
  • A&L Discount Beverage, 1236 E. Silver Springs Blvd., Ocala
  • Sam’s Super Market Inc., 3930 W. Columbia St., Orlando
  • Sam Service Station Inc., 1208 Bruton Blvd., Orlando
  • Stop N Shop 441, 5724 Royal Palm Blvd., Margate
  • Williston Corner Market, 524 W. Noble Ave., Williston

 

How The Post got the story

When the Florida Lottery announced that it had shut down lottery privileges at 18 stores in the wake of Palm Beach Post stories detailing improbable winners, The Post asked to review the closed investigative files under Florida’s broad public records law.

Initially, lottery officials provided a heavily redacted sample of one report, showing virtually no information to explain how the store violated lottery rules and merited being shut down. For the remaining seven reports, lottery officials demanded a $130 redaction fee.

Two reports had been sent to an Orlando-area TV station with minimal redactions. State public records laws do not allow government agencies to pick and choose what they redact based on who requests the information.

Lottery officials used an internal agency rule – not state law, as required – to respond to The Post’s initial request, a lottery spokeswoman said. Officials did not apply that standard to the TV station’s request. After The Post pressed the issue, the spokeswoman said lottery officials deemed the rule invalid and complied with state law, providing the files to The Post without charge and with few redactions.

What The Post Found

At least five of the 18 outlets whose lottery sales were stopped were identified in The Post’s March 30 investigation. The story prompted the lottery to launch an investigation the day after it was published, lottery records show.

No matter who bought it, one winning lottery ticket cashed in 2012 had an unusual road to redemption.

The “High Roller” scratch-off card worth $1,000 was sold at a Circle K near Tampa, then scanned at three other gas stations around the state before Amit Thakker cashed it at a Gainesville lottery office.

Its 265-mile spin around the state made it a key piece of evidence in a state lottery fraud investigation, and it’s one of the reasons Thakker’s convenience store can no longer sell lottery tickets.

The Thakkers’ Williston store is one of 18 in the state whose lottery machines have been permanently removed since a Palm Beach Post investigation pointed to rampant evidence of misuse of winning tickets among retailers and winners.

The Post studied the lottery’s most prolific winners — something the lottery wasn’t doing — and found most were store operators. The day after The Post’s story was published, lottery investigators launched a probe into the winningest operators.

Investigators said they found evidence of fraud, though they didn’t charge anyone with a crime, lottery records show.

When asked why, the lottery said in a statement, “This particular list of retailers had their contracts with the Florida Lottery terminated for non-criminal reasons.”

At least five of the stores’ contracts were terminated for “conduct prejudicial to public confidence in the Florida Lottery,” records show.

The Post’s March 30 story showed store owners and others were cashing in tickets at incredible rates, defying nearly impossible odds. Nita and Amit Thakker ranked third and fourth, respectively, in the state with 214 jackpots combined worth more than $500,000 since 2005, for example.

Lottery investigators found that their “High Roller” ticket was scanned at stores as far south as Fort Myers before it was cashed. They concluded that the pattern was so unusual that the Thakkers didn’t buy the ticket themselves.

“Evidence will show activity that has been proven to be consistent with ticket brokering,” investigators wrote about the Thakkers.

Cashing someone else’s ticket is a misdemeanor in Florida. Ticket brokers often cash them to help someone else avoid paying taxes or other obligations.

The 18 stores combined to sell more than $8 million of lottery tickets in 2012, the most recent year in which The Post has complete data.

The owners of the stores will never be allowed to sell lottery tickets again, the investigative files show. If they change ownership of the store, new owners will not be able to sell tickets for six months.

That could put convenience stores at a disadvantage because they would lose customers who come in only to buy lottery tickets. Stores also receive a 5 percent commission on sales, plus bonuses if they sell jackpot-size winners.

But some have been involved in a black market in tickets, paying 70 cents on the dollar to help winners avoid taxes and get cash quickly.

113-time winner

Lottery officials found unusual patterns in where the owners’ tickets were purchased, how often they were scanned to see if they had won and how long the winner took to cash them.

When most people are lucky enough to win a rare prize worth $600 or more, they cash the ticket within a few days.

But investigators found that with the owners of the 18 stores, that frequently wasn’t the case.

Adel Khazem, owner of a Stop N Shop corner store in Margate in Broward County, has won at least 113 times since 2009, collecting $223,000.

Investigators examined 13 of his tickets. The lottery keeps data that shows when the code on every lottery ticket is scanned by a lottery terminal and used it to track his tickets. Customers with dozens of tickets often ask clerks to scan them to see if any are winners.

Investigators found that Khazem waited more than a month to cash in one ticket after learning it was a winner, but during that month, he cashed in other tickets. That could have happened if someone else bought the winning ticket but hadn’t sold it to him yet.

There were other problems with his wins, too. He signed his checks for lottery winnings over to his brother, but couldn’t explain why, according to lottery records. He didn’t respond to call for comment.

And even though his biggest winner, a $30,000 scratch-off ticket, was sold from a gas station in the Panhandle, he couldn’t remember where the ticket came from.

“The activity observed to be conducted by Mr. Khazem appears to be the results of either defrauding players of their tickets or ticket brokering,” investigator Don Mardis wrote in his final report.

Winners for sale

Prizes worth $600 or more have to be redeemed at a lottery district office. But before giving the customer a check, the lottery makes sure the person doesn’t owe child support, taxes or similar obligations.

That can prompt some winners to have someone else cash in their tickets, often for a fee. And sometimes store clerks acting as ticket brokers convince customers in the country illegally that they can’t cash the ticket without being deported. That’s not true.

According to the lottery investigation, these customers go from store to store to have someone cash in their ticket. At each store, the ticket is scanned, until an owner agrees to buy the ticket from the customer.

“The retailer/clerk then files the claim in their name,” investigators wrote in the Thakkers’ report.

Other stores identified by The Post have lost their ability to sell tickets, too.

Vipul Shukla, who owns and operates the Midway Food Mart in Fort Pierce, has claimed more than 150 wins worth more than $300,000. He ranked in The Post’s analysis as the 10th most prolific winner in the state.

At the time, he said he had been cashing in tickets for customers but stopped. When lottery investigators asked, he denied it.

But they found discrepancies when they interviewed him by phone. He said he waited until he had two or three winning tickets before making the drive to the district office in West Palm Beach. But some tickets he held for 289 days; others he cashed within a few days after they were first scanned.

Scheme revealed

The lottery cut off sales in April at three stores in Pompano Beach — Akel Market, Kwik Stop #4 and Georgia Market. The most prolific winner in The Post’s investigation, Louis Tillman Johnson, later admitted to lottery investigators that he took a 10 percent fee from Foad and Kaiser Akel of Akel Market to cash in other players’ winnings. They kept 18 percent, Johnson told investigators, leaving a 72 percent payout to the real winners.

It’s unclear from the reports whether the lottery interviewed the Akels about Johnson’s claims.

Johnson redeemed more than 280 tickets worth $773,000 since 2007, The Post found. Initially, he told investigators somebody else cashed in tickets in his name. But when presented with surveillance photos showing him entering and leaving the West Palm Beach district office, he told them about the scheme.

The other store owners who lost their licenses include:

  • Nilamben Patel, who owns two stores near Daytona Beach, has won more than 100 big prizes worth $212,000 since 2000. A sample of some of her tickets found they were often sold and scanned at other stores before she cashed them in. “If she knew these were winning tickets,” investigators wrote, “why should they be rescanned so many times?” Patel could not be reached for comment.
  • Chirag Parmar, who owns seven stores in and around St. Petersburg, has won 32 prizes worth $37,000 since 2006. A sample of his tickets showed he waited months after they were first scanned before he cashed them in. “None of it is true,” he told The Post. “Nothing wrong has been done.”
  • Mayank Patel, who owns the A&L Discount Beverage in Ocala, has won at least 66 times for $116,000 since 2002. One of his tickets was held for 95 days after it was scanned, even though he cashed in nine other tickets the next day. His license was suspended after he hung up while an investigator was interviewing him on the phone. He wasn’t able to be reached for comment.



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