In February 2008, Kendrick D. Francis won a 10,000-to-one bet on the Pennsylvania Lottery's Big 4 game for a payday of $532,000.
But, federal prosecutors in Delaware said, that apparently wasn't enough for Francis, a Wilmington resident, who then conspired with a convenience-store operator to hide his winnings and make it appear a number of other people had won instead to avoid federal taxes.
This month, the U.S. Attorney's Office for Delaware filed felony conspiracy and tax evasion charges against Francis and Chirag R. Patel, each of which carries a maximum penalty of three years in prison and a $100,000 fine. According to court papers, the 50-year-old Francis was such a regular lottery customer at Conley's Market in Woodlyn, Pa., that he was allowed to phone in his orders for lottery tickets and pay for them the next day.
And on Feb. 23, 2008, Francis phoned in an order for 360 tickets, at 50 cents each, all with the number 4177.
Two hundred of those tickets were played "straight" — meaning it had to be an exact match to win — and 160 tickets were "boxed," in which any sequence of those numbers would pay off, but for a smaller amount.
According to criminal information filed against the pair, Patel offered to help Francis in cashing in the 200 "straight" tickets to avoid owing taxes on the full jackpot.
In exchange for a $50,000 "fee," Patel had others — for several hundred dollars per ticket — cash in the winning tickets over the next month at Conley's Market or a nearby gas station, according to prosecutors.
Court papers claim the men later lied on their 2008 tax returns, with Patel failing to claim the $50,000 "fee" as income and Francis failing to acknowledge $249,500 of his lottery proceeds as well as claiming a $90,000 debt for the year due to "gambling losses."
It is unclear in court papers how law enforcement became aware of the scam, and Assistant U.S. Attorney Lesley F. Wolf declined comment this week, as did Patel's attorney, Edmund "Dan" Lyons.
Francis' attorney, John Malik, said his client was "overcome by his tremendous luck" at winning the lottery but his enthusiasm "led to some very bad decisions" about trying to avoid his tax responsibility.
Malik said his client has hammered out an agreement with prosecutors and plans to plead guilty and accept responsibility for his actions.
A date for Francis to enter a plea has not yet been set.
Ughhhh
The Federal Government shouldn't be taxing Lottery Winnings...
EDIT: If I ever one 180 times straight and box on Pick 4... if there were no federal taxes- that'd be the day.
Although you can't go to a lottery website and find out where every winner was bought, the lotteries track every winner and 200 straight pick4 winners from one store is going to be noticed regardless of where they were cashed. Plus I thought any ticket worth more than $600 require the winner to fill out papers for a W-2G which means the folks who cashed those tickets may had paid some taxes too.
Great point!
Ah yes. Money does strange things to people.
I say take all the winnings away from the winner. Heck, I would be so happy just to win. Tax me away just let me win.
Curious if it might have gone unnoticed had it been won on bunch of pick 3 or scratchers instead. Probably not because there are camera and scanners everywhere.
LOL.... luisM I was thinking the same thing ..."tax me away just let me win"
Wow, he's in a world of hurt! How did he think he was going to get away with it, anyway? Since the government is hurting for money, and I'm not blaming him for trying to keep his, the government is attempting to squeaze every nickel and dime from its citizens to pay for 1) roads; 2) war; 3) building projects; 4) education; 5) loss revenues by the democrats and the republicans); 6) Obama's Wall Street bail out; and anything else the government can perceive as belonging to them.
Why do people think they can outwit the government with schemes of tax evasion at anytime. I sat on a Grand jury many years ago for a story involving a lottery winner very similar to this. The barcodes on the tickets have codes the feds follow. Series of winning tickets such as his 200 str8 and 100 or so boxed can easily be tracked. The time of the purchase, merchants special code, terminal that the ticket is generated from are all located in the barcodes.
It's best to buy the winning tickets and pay the taxes. Even the taxesyou pay is going to hurt, but, being a storyline whose story ends in jail hurts even more, for you and your family..
Tax away...tax away..as long as I win who cares?? also there's no state tax in Delaware which makes this story even worse
I really don't think they'd have come after him if he had say 30 box bets. But god , you can't skip on over 100,000 dollars worth of taxes. If he really had 90000 in Gambling losses - I'm pretty sure he could have put the 90000 against the (a little more than) 500000 and claim the taxes on the difference back. If my understanding of the federal taxing of lotteries is right, he could potentially have only owedabout 75000 in taxes.
It is just another case of greed and stupidity. The tickets are tracked to see where the winners are. Also, if he didn't pay for his tickets on the spot in cash but instead had some kind of "credit thing" with the merchant isn't that illegal, too? I thought you couldn't play on credit.
It'd have made no difference, even without video (with any printed-on-the-spot tickets, at least); when you buy tickets, the time of the purchase is one of many things encoded on them.
There's no way multiple real people could place a buy in the same location (and what are the odds of them all playing the same number) and complete their transaction in as short a space as it would take one person to buy the same quantity of tickets.
Minutes vs. milliseconds.
Any time some one buys 360 pick3 or pick4 tickets with the same numbers and win $516,000, it's going to be investigated for security reasons. When you consider the normal payouts amount for the whole state and one store sell 50% of the winning tickets in a period of 10 minutes, what do you think going to happen.
After paying his partner in crime a $50,000 fee and a fee to those who actually cashed the tickets he probably would have been ahead to have just cashed the tickets himself, claimed his losses of $90,000 from other drawings and paid the taxes.