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Pa. man pleads guilty in bizarre lottery tax case

Pennsylvania LotteryPennsylvania Lottery: Pa. man pleads guilty in bizarre lottery tax case
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PITTSBURGH, Pa. — A 70-year-old Pennsylvania man faces up to a year and half in prison for having more than 40 people cash in lottery tickets worth $520,000 so he could avoid paying federal income tax on the winnings.

Sherman Friend, of McClellandtown, faces a sentence of 12 to 18 months in federal prison when he is sentenced Feb. 15 on the tax evasion charge he pleaded guilty to Friday before U.S. District Judge Arthur Schwab in Pittsburgh.

Assistant U.S. Attorney Nelson Cohen said Friend won big when he bought 208 50-cent tickets on the number 1127 for the lottery's mid-day Big 4 drawing on Dec. 17, 2009. Each ticket was worth $2,500, so Friend asked more than 20 friends who, in turn, recruited others, to cash the tickets so the tax liability couldn't be traced back to him.

In most instances, Friend paid the ticket-cashers $250, or 10 percent of each ticket's value, Cohen said.

Friend's attorney, John Cupp Jr., declined to comment about how often Friend plays the lottery or whether he was using a system to place his bets.

"I wish I knew," Cupp said.

Friend had previously won a vehicle in a fire department raffle in Maryland in 2007 and became angry when he learned he owed income tax on the vehicle, which he had given to a relative, Cohen said.

"We would submit that as evidence of his knowledge that if you won a lottery or raffle, you have to pay the tax," Cohen told the judge.

So, when Friend hit big on the lottery, he was determined to avoid the taxes.

"He went on to explain that he didn't feel he owed the taxes on these moneys," Cohen told the judge, referring to a statement Friend gave to Internal Revenue Service investigators.

In all, Friend avoided more than $132,000 in federal income taxes by failing to declare his cut of the winnings, which added up to more than $481,000 in 2009 and 2010, the two years in which he had the others cash the tickets. The lottery winnings were Friend's primary source of income in those years.

Cohen told the judge that Friend has agreed to repay the back taxes and that he may be sued by the IRS for penalties and interest, which have yet to be calculated.

AP

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73 comments. Last comment 2 years ago by mjwinsmith.
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Avatar
nanaimo,bc
Canada
Member #93112
June 21, 2010
22 Posts
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Posted: September 28, 2012, 1:32 pm - IP Logged

mr.friend tried his best efforts NOT to pay taxes and now he is caught he should pay the penalty and serve the law ful time in jail he has earned the jail timeSmash

    RJOh's avatar - chipmunk
    mid-Ohio
    United States
    Member #9
    March 24, 2001
    17444 Posts
    Offline
    Posted: September 28, 2012, 1:36 pm - IP Logged

    "Friend's attorney, John Cupp Jr., declined to comment about how often Friend plays the lottery or whether he was using a system to place his bets."

    Sounds like they not only wanted to punish him and get the unpaid taxes, but someone wanted to get his system too.

    * Thoses who can, do * 
    * thoses who can't, just talk *
    Roll Eyes 

      Avatar
      Georgia
      United States
      Member #6168
      August 9, 2004
      220 Posts
      Offline
      Posted: September 28, 2012, 1:50 pm - IP Logged

      i know right.

      i probably would have tried the same thing. i have played .50 straights before of cash 4 so that i wouldn't have to pay the taxes if i won i still do. i gotta give it to give him for trying. i don't blame him ,i want all my money too. but i havent went to the extreme as 208 tickets. wow. but if he did have a system. he could have gotten away with it, he just went about it all wrong concentrating on that one number like that. he could have play ten and this number . 50 straight, a couple of days later.  ten on that number . 50 straight... and so on and just slowly cash them in with just you and probably 2 other people. he caused to much attention to himself on that number.

        RJOh's avatar - chipmunk
        mid-Ohio
        United States
        Member #9
        March 24, 2001
        17444 Posts
        Offline
        Posted: September 28, 2012, 2:02 pm - IP Logged

        mr.friend tried his best efforts NOT to pay taxes and now he is caught he should pay the penalty and serve the law ful time in jail he has earned the jail timeSmash

        Sounds like he didn't try hard enough.  He should had set up his system as some kind of investment scheme rather than income, that way he wouldn't have had to pay any more taxes than he paid his friends to cash those tickets for him.  I'm sure he could have found some lawyers like Romney used to get his tax rate to 13% or less.

        * Thoses who can, do * 
        * thoses who can't, just talk *
        Roll Eyes 

          Set4life's avatar - 2554
          East Hampton, NY
          United States
          Member #41995
          June 25, 2006
          1133 Posts
          Offline
          Posted: September 28, 2012, 2:26 pm - IP Logged

          <snip> what a win!  Tim Geithner cheated on his taxes and got a job as Sec. Of treasury lol

          This post has been automatically changed by the Lottery Post computer system to remove inappropriate content and/or spam.

               $Big Grin Santa$

               FOR THE WIN!

            helpmewin's avatar - dandy
            DON'T HATE THE PLAYA HATE THE GAME
            u$a
            United States
            Member #106669
            February 22, 2011
            16290 Posts
            Offline
            Posted: September 28, 2012, 2:44 pm - IP Logged

            Wow, i thought taxes is already taken out as soon as you Win Smiley

                             

              Wooddrive's avatar - Lottery-046.jpg
              Delco PA
              United States
              Member #80104
              September 16, 2009
              194 Posts
              Offline
              Posted: September 28, 2012, 3:33 pm - IP Logged

              Wow, wish I won more than 500Grand. I'll gladly pay 25% fed tax and keep 375Grand for myself. Better than not winning. Could have sold the strategy and made more money. If there was one. Dropping $104 on one number takes some balls...


                United States
                Member #116272
                September 7, 2011
                20244 Posts
                Offline
                Posted: September 28, 2012, 3:54 pm - IP Logged

                Its my guess that this guy is wealthy...... remember when the IRS showed up at Willie Nelsons house??

                  rdgrnr's avatar - walt
                  -Ridge Runner- Oracle of the Appalachians
                  Way back up in them dadgum hills, son!
                  United States
                  Member #73904
                  April 28, 2009
                  14742 Posts
                  Offline
                  Posted: September 28, 2012, 3:55 pm - IP Logged

                  Wow, wish I won more than 500Grand. I'll gladly pay 25% fed tax and keep 375Grand for myself. Better than not winning. Could have sold the strategy and made more money. If there was one. Dropping $104 on one number takes some balls...

                  The rate is 35% and the President wants to make it 45% after the first of the year.


                                                               
                                       
                                                           

                   

                   

                   

                   

                                                                                                                     

                  "The only thing necessary for evil to triumph is for good men to do nothing"

                                                                                                              --Edmund Burke

                   

                   


                    United States
                    Member #116272
                    September 7, 2011
                    20244 Posts
                    Offline
                    Posted: September 28, 2012, 3:56 pm - IP Logged

                    Yeah but thats only on the rich.............. Right????????

                      rdgrnr's avatar - walt
                      -Ridge Runner- Oracle of the Appalachians
                      Way back up in them dadgum hills, son!
                      United States
                      Member #73904
                      April 28, 2009
                      14742 Posts
                      Offline
                      Posted: September 28, 2012, 3:58 pm - IP Logged

                      Yeah but thats only on the rich.............. Right????????

                      It'll come out of your jackpot no matter if you're rich or poor.


                                                                   
                                           
                                                               

                       

                       

                       

                       

                                                                                                                         

                      "The only thing necessary for evil to triumph is for good men to do nothing"

                                                                                                                  --Edmund Burke

                       

                       

                        sully16's avatar - sharan
                        Listens to the wind

                        United States
                        Member #81740
                        October 28, 2009
                        17928 Posts
                        Offline
                        Posted: September 28, 2012, 4:17 pm - IP Logged

                        Hello Friend, said the cell mate.

                        There's only one US Flag

                          Wooddrive's avatar - Lottery-046.jpg
                          Delco PA
                          United States
                          Member #80104
                          September 16, 2009
                          194 Posts
                          Offline
                          Posted: September 28, 2012, 4:22 pm - IP Logged

                          The rate is 35% and the President wants to make it 45% after the first of the year.

                          your rate is 35%, mine is 25% buddy.

                            Artist77's avatar - batman14

                            United States
                            Member #121750
                            January 16, 2012
                            2885 Posts
                            Offline
                            Posted: September 28, 2012, 4:33 pm - IP Logged

                            The rate is 35% and the President wants to make it 45% after the first of the year.

                            The "current" president.

                            Just as the bird sings or the butterfly soars,

                            because it is his natural characteristic,

                            so the artist works.

                            by Alma  Gluck