Mystery man granted immunity in $14 million lottery fraud

Tuesday, 8 Oct 2013

 

Iowa Lottery CEO Terry Rich is warning that it will deny payment of a mysterious jackpot claim if the New York lawyer who made it doesn't provide key details to confirm whether the ticket was legally purchased and possessed.

Investigators trying to unravel the mystery behind a bogus claim for a $14.3 million Iowa Lottery jackpot in 2011 have received valuable information from a man in Canada who has been granted immunity from prosecution, an official said Monday.

An agent traveled to Canada to conduct an interview a month ago after reaching an agreement in which a person of interest was guaranteed he wouldn't face prosecution for any crime related to the jackpot, Iowa Division of Criminal Investigation assistant director Gerard Meyers said. Since then, investigators have been working to verify the information the person gave them and locate and interview others who may be involved, he said.

The case has baffled authorities from the beginning but the development has injected new life into the investigation, which is approaching two years old.
It started when lottery officials in December 2010 drew winning numbers for Hot Lotto, a game played in Iowa and several other states. Months passed and no one redeemed the winning ticket, which was purchased at a Des Moines gas station. As the one-year deadline for the prize drew near, Iowa Lottery officials started plotting ways to use the leftover money.
But with hours to go, attorneys representing 76-year-old New York lawyer Crawford Shaw came forward with the valid, winning ticket (which had just been delivered by FedEx to Iowa).
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Shaw signed it on behalf of a newly created investment trust. He later said that he was representing an attorney for a person who purchased the ticket, and that he did not know the winner's name. He said the trust's proceeds would go to a corporation in Belize, a known tax haven.
Lottery officials refused to pay the jackpot until Shaw divulged names of everyone who had possessed the ticket, saying they wanted to know that it had been legally possessed. Shaw refused, eventually withdrawing the claim in January 2012. The winner or winners walked away from millions, and DCI launched an investigation led by agent Matt Anderson.
Many theories have been floated about what happened. Perhaps the ticket was stolen after the winner bragged about the jackpot. Maybe the winner did not want to be linked to the money due to illegal activity and tried to sell the ticket to someone else. Or a foreign criminal syndicate bought the winning ticket and illegally scalped it for cash.
Investigators have said that gas station surveillance video shows a person purchasing the ticket, but that footage has been withheld from the public so as not to jeopardize the investigation. Meyers said investigators still do not have a positive identification of the buyer, but that, "We have a potential party that may be able to help us identify that subject."
Meyers said the immunity agreement with the person of interest in Canada was reached with help from the Iowa Attorney General's Office. He said it was appropriate because investigators were certain the man was not the prime suspect and all other efforts to obtain his cooperation had been exhausted. Investigators also had little leverage since he was in another country, he said.
"We had to put forward an agreement that would motivate him to cooperate," Meyers said.
Anderson has recently been reassigned as part of a routine transfer within DCI, but Meyers said Anderson was kept as the lead investigator due to the complexity of the case. Anderson's knowledge was "very valuable" during the interview in Canada because he knew which questions to ask, Meyers said.
Meyers said investigators are seeking to conduct additional interviews with "an array of other parties" who may be involved. But he also cautioned they've had promising leads in the past that hit dead ends.
"The developments are positive," he said. "Yet at the end of the day, we don't have resolution and it continues to be an ongoing investigation."
—By The Associated Press

http://www.cnbc.com/id/101096579