Gaming the lottery: The Post finds improbable winnings; could it be crime?

Amit and Nita Thakker are two of the luckiest people in Florida.

The Florida Lotto? They’ve won big cash three times.

The Fantasy Five? Won that four times.

The Play 4? Pssshhh.

They’ve won that 95 times.

Altogether, the Thakkers have won prizes worth $600 or more 214 times since 2005, collecting a cool $531,000.

The Thakkers say it’s mostly luck.

Other lotteries have seen stories similar to these. Their findings: It’s mostly crime.

Florida’s most prolific winners might be too lucky, and Florida’s Lottery can’t explain why, a Palm Beach Post investigation has found. The winning patterns raise red flags that have led other lotteries and police to uncover widespread ticket theft by store employees, neighborhood “ticket brokers” who helped winners avoid taxes, even drug lords laundering money.

GAMING THE LOTTERY: A Palm Beach Post investigation

These people are not the lucky jackpot winners you see on the news. Rather, they’re flying under the radar, cashing in tens or hundreds of tickets, each usually worth between $1,000 and $20,000. Six of the top 10 winners are like the Thakkers, store clerks and owners who sell lottery tickets.

They’re defying the odds. But their patterns also defy logic. Take these cases:

  • Louis Tillman Johnson had never been lucky until October 2007. Since then, lottery records show he’s cashed in a big winner every 11 days, on average, collecting $719,000. Half of the top 10 winners are like Johnson: no wins for more than a decade, then incredible winning streaks.
  • Sherry Monestime gets lucky wherever she goes. The Lantana woman has hit it big with tickets from 55 different stores across four counties, from Surfside to Fort Pierce. Most of the top winners are equally lucky: They’ve all cashed in big tickets sold at 30 or more stores.
  • Jacqueline Antionetta Barnes has far outpaced everyone who plays the lottery at the J.W. Food Store in Riviera Beach. She’s cashed in two of every three winning tickets sold there since 2008, collecting $494,500.

Florida’s state-run lottery lacks many of the safeguards used by other lotteries to track unusual winners. And officials here can’t explain how these people win so often.

Lottery Secretary Cynthia O’Connell said they could be lucky.

“That’s what the lottery is all about,” she said. “You can buy one ticket and you become a millionaire.”

GAMING THE LOTTERY: An international investigation into the global lottery industry

Lottery Inspector General Andy Mompeller doesn’t agree.

“Nobody wins that much,” he said. “The odds are what they are.”

Those mixed signals extend to questions about these winners. Security officials, when asked by The Post, said some winners are on their radar, repeatedly mentioning “the potential for an ongoing investigation.”

But their winning streaks go back years, and when The Post spoke to some of them, they said no one had ever questioned their wins.

Lottery officials point out that winning so often isn’t proof of a crime, and The Post’s analysis of public records cannot conclude whether any crime has been committed.

To discover these extraordinary winners, The Post spent months analyzing the lottery’s list of more than 600,000 people who won $600 or more since 1993 and focused on those who recently cashed in tickets the most often — something the lottery doesn’t do.

Most people, 96 percent, cashed in winners on four or fewer dates between 2003 and August 2013. But The Post found more than 200 people who have cashed in big winners at least 30 times.

Other lotteries do the same analysis for one reason: They know that winning even $600 in the lottery is rare; when somebody does it a lot, it means something’s wrong.

California and Ontario discovered some store clerks were top winners because they stole winning tickets from unsuspecting customers or shortchanged them. The clerks would run tickets through a machine behind the counter and tell players that their tickets were either all losers or small winners.

Other lottery schemers appeared as big winners because they cashed in tickets for people looking to avoid paying child support or back taxes. If a winner owes child support, for example, the lottery will take that money out of their winnings. A ticket casher will help them avoid it. Although it’s illegal, the lottery has stopped pursuing some of these cases because prosecutors won’t go after them.

Still others were drug dealers and other criminals who used lottery tickets to launder money. The Post found examples in six states, including Florida, where a drug dealer and a lottery employee laundered half a million dollars through the lottery in the 1990s before federal authorities caught up to them.

The Florida Lottery is the second largest in North America, but it’s taken only meager steps to prevent these kinds of fraud.

Officials have little idea who’s operating its lottery terminals at more than 13,000 outlets. Unlike the biggest Canadian lotteries, for example, it backgrounds only store owners, not employees.

They also don’t know if retailers or employees are cashing in tickets. Unlike California and other states, Florida doesn’t ask.

And while they have rolled out undercover operations to catch dishonest clerks, their scope is far smaller than California, which has conducted stings in at least 10 percent of its outlets. Florida has gone undercover at less than 2 percent of its outlets.

Against all odds

Abdorauf “Abdul” Hammad has a unique explanation for his 82 lottery wins, worth $279,000, over the past decade.

“I dream in numbers,” he said.

Hammad spoke to The Post during his break at the Mercado Oriental corner market in Miami’s Little Havana, where he tends the cash register and lottery terminal.

He said he can’t predict the numbers, of course. That would be preposterous. But when he sees one in a dream, “you have to write it down right away.”

He would have to be getting his numbers from on high to win as much as he does.

Skip Garibaldi, a professor at Emory University and associate director of the Institute for Pure and Applied Mathematics at UCLA, estimates Hammad would have to spend $1.23 million to have the most remote chance of winning as often as he did. He would have lost nearly $1 million over the past decade.

That $1.23 million would give Hammad only a 1-in-20-trillion chance. That’s like picking one star out of 50 galaxies, then having your friend guess the same star on the first try.

Garibaldi applied the same analysis to the other nine most prolific winners. He found all but one would end up big losers, most to the point of absurdity.

Jose Mario Campos Pires, for example, operated the Quick and Easy Food Store at 6490 SW 40th St. in Miami until recently.

Between 2003 and 2012, he cashed big tickets 111 times from 30 different stores, collecting $344,000.

To win that many times, Campos Pires would have had to spend at least $2.41 million, Garibaldi calculated, meaning he would have lost nearly $18,000 a month for almost a decade.

Campos Pires sold his store last year. When reached by phone, he said he knew he’d won a lot, but didn’t believe he’d won as often as lottery records show. He won simply by playing the game, he said, estimating he spent $10 to $15 per day on the lottery.

That’s only about $53,000 in spending over his winning streak. He laughed when told he’d have to spend millions to duplicate his wins.

“That’s not true,” he said. “I’m not a rich man.”

Lottery odds designed to be poor

The lottery isn’t designed to produce frequent winners. It’s designed to raise money for education.

For every $100 spent on the lottery, only $61 goes back to winners, a rate far worse than most casino games. You can walk away from a blackjack table with more money than you started with; it’s next to impossible to do that playing the lottery.

To maximize the amount that goes to public schools and college recipients, lottery games are carefully engineered to produce certain odds. All of the odds are lousy.

Hitting a $1 million jackpot is nearly impossible. Even amounts that are not life-changing are abysmal. Of the 82 different scratch-off games, only one in every 8,700 tickets is worth $600 or more, and the rate is worse for online games like Play 4 — about one in 39,000.

And you can forget about fixing the games. Security is too tight to rig a draw game like Mega Millions. Producing fake scratch-offs doesn’t work anymore. Popular schemes like “predicting” winning numbers have been totally discredited.

So when some people go on extraordinary winning streaks, it means one of two things: either they’re spending — and losing — an absurd amount, or they’re not playing by the rules.

Jeffrey Rosenthal is a University of Toronto professor and the author of Struck By Lightning: The Curious World of Probabilities. He was instrumental in the investigation that led to multiple arrests of Canadian clerks who were stealing tickets.

Rosenthal came to the same conclusion as Garibaldi about Florida’s winners. The top winner would have to buy 1,050 tickets every day for six years to have just a 1 percent chance of winning so often, he calculated.

“It seems pretty inconceivable that anyone would buy that many tickets,” Rosenthal said. “It seems more likely that they’re somehow getting tickets after they’ve been won.”

A law not enforced 

Louis Tillman Johnson said he buys tickets only a couple of times a week, when he has spare change.

Johnson, 68, lives in a tiny rental home off Copans Road in Pompano Beach. He can’t afford to fix the 1994 Ford F-150 pickup parked on his lawn.

“If I had $700,000, that’d probably be a brand new Chevy right now,” he gestures, holding one of his grandchildren in his lap. He cares for two of them.

On paper, Johnson is the most prolific lottery winner of the past decade. He’s cashed in a winning lottery ticket worth $600 or more 252 times since 2007, collecting $719,000.

He’s won 55 different games, including the $20,000 top prize in one scratch-off with odds of one in 1.68 million. The tickets came from 69 different stores, from North Lauderdale to Vero Beach.

But he says he’s not the real winner. He believes someone is cashing tickets in his name.

He said the IRS has sent him letters claiming he owed roughly $50,000 in taxes from lottery winnings. He told them it wasn’t him, that there must be some mistake.

“They didn’t believe me,” Johnson said.

If Johnson is not the person cashing in the tickets — the lottery wouldn’t provide enough information to confirm or deny it — that would mean someone else is cashing in tickets in his name and sticking Johnson with the tax bill.

Ticket brokers, who cash in winning tickets for other people, would have an incentive to do that.

The lottery automatically withholds federal lottery taxes from winning tickets above $5,000, but winnings between $600 and $5,000 have to be self-reported to the IRS, which takes a 25 percent cut in addition to income taxes.

The lottery automatically checks if you owe debts to the state or child support, and takes that out of the winnings. That’s an incentive to have someone else cash in the ticket, typically for a fee. Illegal immigrants also can be coerced, for fear that by going to a district office, they’ll be noticed and deported.

Ticket-cashers, known as “brokers” or “middlemen,” are no secret to the industry. The Massachusetts auditor noted that these people cashed in more than $16 million in tickets in that state’s lottery in 2007. In 2011, Florida Attorney General Pam Bondi shut down a company that was offering ticket-cashing services.

One of Florida’s top winners even admitted to it.

Vipul Shukla has won 140 times, cashing in more than $300,000, since 2006. Most of those are from the Fort Pierce liquor store he owned, the now-closed G&V Discount Beverage & Food at 2725 S. U.S. 1.

When asked how he could be winning so often, Shukla said, “It’s all random.”

But when asked whether he cashed tickets for other people, he said, “I did do that, but that was a long time ago.” He estimated four years ago. His wins stretch from 2006 to 2013.

He didn’t respond when asked how he came by the tickets and whether he charged people to turn them in. He then said he “could be in trouble” and declined further comment.

In Florida, cashing in someone else’s ticket for a fee is a first-degree misdemeanor punishable by up to a year in jail and a $1,000 fine. But Lottery Director of Security Doug Pitts said they’ve stopped pursuing ticket cashers since, in many cases, prosecutors view both parties as consenting adults and have declined to prosecute.

“Technically, it is illegal, but … that kind of ties our hands,” he said of prosecutors. “There’s only so much we can do.”

Catching dishonest clerks

“Brokering” tickets is one way someone could appear as a frequent winner. But other lotteries found more nefarious examples.

In Canada and California, security officials discovered most of the top winners were store clerks and owners, and they were stealing tickets from customers.

The scam works like this:

When you buy a lottery ticket, you have a few ways to determine it’s a winner.

If it’s a scratch-off, the symbols underneath the wax will tell you.

If it’s an online game, you can watch the drawing on television or check it online.

Even then, it’s not always easy to tell if your ticket is a winner. Some of the games are confusing, and that’s partly the reason that roughly $63 million in Florida Lottery winnings went unclaimed last year.

The surest way to see if you’ve got a winner is to go to a lottery terminal and scan the barcode on the ticket.

About half of the outlets in Florida have self-checking terminals. For ones that don’t, the customer hands his tickets to the clerk, who scans them in the machine behind the counter. The machine isn’t visible to the customer, so an unscrupulous clerk could say there are no winners or pay only part of the winnings.

The player, expecting to lose anyway, doesn’t think twice.

Going undercover

The problem is epidemic in lotteries that haven’t tried to stop it.

To catch dishonest clerks, Bill Hertoghe, former director of security for the California Lottery, did undercover stings on random stores with investigators posing as customers. Winning tickets were stolen 18 percent of the time. In some places, such as San Francisco, tickets were stolen at twice that rate.

André Marin, who runs a watchdog agency for Ontario, issued a scathing report about the prevalence of ticket theft by store clerks there in 2007. He got calls from lottery officials as far away as China, who also noticed that the most frequents winners were “insider wins” — lottery clerks and owners.

“Whole lottery systems around the world seemed to be rigged,” Marin said.

Florida’s lottery agents also have noticed it. They’ve done undercover stings on 234 of the more than 13,000 stores that sell lottery tickets over the past four years.

Ten percent of clerks took the agents’ tickets, including Jayendrasinh Thakor, an Auburndale store clerk arrested in 2011 who later pleaded no contest to charges that included grand theft. He was sentenced to three years of probation.

Florida’s approach to these operations differs from California’s. California investigators go to as many stores as they can, then publicize the results so that clerks don’t know whether the next person who walks in is a customer or an agent.

Florida agents go to few stores and don’t publicize the results. Thakor’s arrest, for example, was never touted. The lottery never mentioned their retailer integrity program on its website until Friday, the day this story was published online.

The results also are different. California’s strategy has worked: Fewer than 2 percent of clerks there take agents’ tickets. In Florida’s most recent operation, in June 2013, clerks took agents’ tickets nearly 9 percent of the time.

Florida Lottery Secretary O’Connell, who was unfamiliar with the Canadian scandal, believes her system works, and publicizing the results of their operations would tip their hands. Store owners and clerks hear of the operations by word of mouth anyway, she said.

Florida’s agents do stings mostly prompted by complaints. In the past three years, dozens of people have complained to the lottery of having their ticket stolen, being cheated by a store clerk, or having a clerk offer to buy their ticket, lottery records show.

The lottery has caught some people in its stings. But The Post couldn’t find any that faced jail time after their arrests. One case was dropped after prosecutors said they didn’t have the investigative reports.

And even if those arrested had been convicted of a crime, the lottery admits nothing stops them from working in a store again.

Dirty money

Then there is organized crime.

Over the past few decades, drug dealers and other criminals in at least a half-dozen states and three continents have exploited their lotteries’ lax security procedures to launder ill-gotten gains. They include:

  • The notorious Boston gangster James “Whitey” Bulger, who got some friends to buy a $14 million Massachusetts Lottery ticket from a legitimate winner in 1991.
  • The multistate “Black Mafia Family” cocaine-trafficking ring, which bought more than $1 million in Michigan lottery tickets from legitimate winners through the 1990s and 2000s.
  • A Brazilian congressman who won various federal bingo and lottery games 24,000 times. Records showed he spent $30 million in government money to win $9 million playing the games between 1988 and 1993.

Florida is also on the list. Federal authorities arrested Carlos Tejas of Miami in 1994 on charges of cocaine trafficking. They later discovered he’d won 13 big lottery tickets in only eight months, collecting half a million dollars. Then they charged him with money laundering and he pleaded guilty to conspiracy to cheat the government out of money.

Like the suspects in the Black Mafia Family, Tejas had the help of a store clerk, who, along with a Florida Lottery employee, steered legitimate winners Tejas’ way. Tejas paid those winners more than the tickets were worth for the ability to tell police that he’d made his money legitimately.

Combating money laundering has become a focus for some European lotteries. A 2006 report from the World Lottery Association, a trade organization, urged lotteries to adopt procedures to deter criminals from using the lottery for money laundering.

Among the WLA’s recommendations were for lottery officials to monitor wins by store clerks and to probe winner databases for repeat winners “that defy the laws of probability.”

The Florida Lottery is not a member of the WLA, and officials here don’t monitor wins by store clerks. Mompeller, the inspector general, said he does track unusual winners, but it’s unclear what he does with the information.

He does have his work cut out for him. The Post had trouble tracking down several winners, including Barnes, the Riviera Beach woman who has cashed in two of every three winning tickets sold from one store.

She owns a business called “Palm Beach Multimedia, LLC,” according to the Florida Division of Corporations. Its official address is in a business park near her condominium.

But The Post couldn’t reach her there. The landlord said no one has rented that space for years.

Her condominium also wouldn’t accept a certified letter sent by The Post. It was forwarded to a P.O. box, then to an apartment she owns on Martin Luther King, Jr. Boulevard.

The Post found her there visiting her sons, who advised her not to speak because they were concerned for her safety. The sons said she was lucky playing 2-0-5-6 in the Play 4.

It hit once, on Jan. 19, 2012.

They said they didn’t know how she won the other times.

‘A huge conflict’

Security improved in other states once the lotteries changed their relationships with retailers.

Lotteries rely on stores to sell their tickets and are reluctant to disrupt that relationship, lottery security experts Marin and Hertoghe said. In Florida, the lottery pays stores a meager 5 percent of commissions on lottery sales. It’s so low that some store owners feel it’s not worth the hassle.

It’s for that reason that there’s little oversight by the lottery of the people who work in stores. In Florida, like most states, officials only do background checks on store owners. But they have no idea who else is working there and operating its terminals.

Marin called the relationships with retailers “a huge conflict of interest.”

“The government dealt with these retailers as partners, and not as arm’s-length business people,” he said. “Check any bank where there’s a vault. You think the bank doesn’t check the backgrounds of the people running it?”

In the wake of its 2007 scandal, Ontario now requires store employees to register with the lottery. It also prohibits them from playing the lottery at their own stores. And when a clerk wins, they’re required to disclose that they work for a store.

Violations result in a store being stripped of its lottery privileges.

California requires store clerks, store owners and relatives of store owners to disclose their relationship when cashing in a big winner, and it also tracks frequent winners.

Some of the changes, such as keeping track of notoriously transient store employees, are too difficult for many lotteries to adopt, said Thierry Pujol, chairman of the WLA’s risk management committee.

But Pujol said it was critical for lottery directors to track every step of the lottery process, including who’s buying the tickets and who’s cashing them in, to prevent fraud. He followed the scandal in Ontario and is adopting one of the ideas from California.

O’Connell, who called retailers the “lifeblood” of the lottery, relies on the retailers to police themselves.

“We do everything in our power, with the means that we have, to not police our retailers, but educate our retailers to do the right thing,” she said.

In the lottery’s first year, 1988, retailers were prohibited from playing. Since then, they’ve been allowed to play without restriction, and O’Connell said she couldn’t change that without the Legislature’s help. She’s not brought the issue to lawmakers.

Marin says lotteries have an ethical obligation to police themselves.

“The government is not just one of those Donald Trump businesses,” Marin said. “They’re in the business of securing public business. That trust can’t be abused.”

Until then, luck might be the only reason the lottery can point to for winners like Sherry Monestime.

The Lantana woman has cashed in big winners from 55 different stores, most of them in Palm Beach County, since she started winning in 2010. When contacted outside her home, she told The Post she’s never won the lottery.

She said that she’d lost her purse and was receiving letters from the IRS claiming she owed back taxes. Lottery records show she’s won $287,000.

Her story changed, however, when contacted a second time. She admitted winning the drawings.

When asked how, she offered a common refrain.

“I’m a very lucky woman,” she said. “I always have been.”

Staff writers Fedor Zarkhin and Pat Beall and researchers Michelle Quigley and Niels Heimeriks contributed to this story.

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