Cracking the Scratch Lottery Code

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Furthermore, the Massachusetts lottery has a history of dispensing large payouts to suspected criminals, at least in one Mass Millions game. In 1991, James "Whitey" Bulger, a notorious South Boston mob boss currently on the FBI's 10 Most Wanted Fugitives list—he's thought to be the inspiration for the Frank Costello character in The Departed—and three others cashed in a winning lottery ticket worth $14.3 million. He collected more than $350,000 before his indictment.

At the time, authorities thought Bulger was using the lottery to launder money: take illicit profits, buy a share in a winning lottery ticket, redeem it, and end up with clean cash. In this respect, the lottery system seems purpose-built for organized crime, says Michael Plichta, unit chief of the FBI's organized crime section. "When I was working in Puerto Rico, I watched all these criminals use traditional lottery games to clean their money," he remembers. "You'd bring these drug guys in, and you'd ask them where their income came from, how they could afford their mansion even though they didn't have a job, and they'd produce all these winning lottery tickets. That's when I began to realize that they were using the games to launder cash."

The problem for the criminals, of course, is that unless cracked, most lotteries return only about 53 cents on the dollar, which means that they'd be forfeiting a significant share of their earnings. But what if criminals aren't playing the lottery straight? What if they have a method that, like Srivastava's frequency-of-occurrence trick, can dramatically increase the odds of winning? As Srivastava notes, if organized crime had a system that could identify winning tickets more than 65 percent of the time, then the state-run lottery could be turned into a profitable form of money laundering. "You've got to realize that, for people in organized crime, making piles of money is one of their biggest problems," says Charles Johnston, a supervisory special agent in the organized crime section of the FBI. "If they could find a way to safely launder money without taking too big a loss, then I can guarantee you they'd start doing it in a heartbeat." There is no direct evidence that criminals are actually using these government-run gambling games to hide their crimes. But the circumstantial evidence, as noted by the FBI, is certainly troubling.

And then there's Joan Ginther, who has won more than $1 million from the Texas Lottery on four different occasions. She bought two of the winners from the same store in Bishop, Texas. What's strangest of all, perhaps, is that three of Ginther's wins came from scratch tickets with baited hooks and not from Mega Millions or Powerball. Last June, Ginther won $10 million from a $50 ticket, which is the largest scratch prize ever awarded by the Texas Lottery.

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