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Trial in N.C. lottery fraud case begins

North Carolina LotteryNorth Carolina Lottery: Trial in N.C. lottery fraud case begins

Federal prosecutors said Thursday that former N.C. lottery commissioner Kevin Geddings spent 60 telltale days last year working for a lottery company, holding a state lottery post and deceiving the public.

In opening statements in Geddings' fraud case, Assistant U.S. Attorney Dennis Duffy said Geddings had a lucrative relationship with lottery vendor Scientific Games that was a conflict of interest as a commissioner. By failing to disclose the relationship, Duffy said Geddings violated a law requiring public officials to provide honest services.

"The evidence will show that the defendant repeatedly failed to disclose his longtime entanglement (and) financial interest with Scientific Games," Duffy said.

Defense lawyer Thomas Manning said Geddings did nothing illegal and had no relationship with Scientific Games as a lottery commissioner. Rather than hiding a scheme to help Scientific Games with North Carolina's lottery contract, Manning said, Geddings was the victim of unfortunately timed payments from the company for work done prior to his appointment to the commission.

"Kevin Geddings' appointment to the Lottery Commission was as close to an accident as could possible happen in politics," Manning said.

Manning said the decision to appoint Geddings was made at a last-minute meeting among House Speaker Jim Black, his former political director and Scientific Games lobbyist Meredith Norris and Scientific Games executive vice president Alan Middleton.

Black, a Mecklenburg County Democrat who named Geddings to the commission, is under investigation for political and campaign activities, including his efforts to establish the lottery. Black has denied knowing that Geddings was a consultant for Scientific Games.

Norris was found guilty last month after pleading no contest to working as an unregistered lobbyist for Scientific Games.

Geddings, 41, of St. Augustine, Fla., was indicted in May on eight counts of mail and wire fraud. If convicted, he could receive 20 years in prison for each count and a $1 million fine.

Duffy said the government's case hinges on efforts by Geddings to conceal his relationship with Middleton and Scientific Games. He said Geddings was paid $253,796 from Scientific Games and a related company from 2000 to October 2005 after he joined the commission. For much of that time he was living in Charlotte, where he owned a public relations firm and two radio stations.

After initially saying he had no conflict of interest, Geddings was forced by media reports in September 2005 to explain that he knew Middleton, saying he subleased office space from him in 2000 in South Carolina. Duffy said Geddings missed that opportunity to reveal more recent work.

Financial disclosures

When Scientific Games told Geddings on Oct. 27 that it was releasing documents showing $24,500 in 2005 payments to Geddings, Duffy said Geddings responded: "If this gets out, I'm done as a commissioner."

Duffy said Geddings went to a Lottery Commission subcommittee meeting the next day and never mentioned the upcoming financial disclosure. He resigned Nov. 1, again never mentioning financial ties to Scientific Games.

Duffy said Geddings was working under a contract with Scientific games, and, beginning in September was dealing with Middleton daily about getting his account paid. In the 60 days from Sept. 1, 2005, to Nov. 1, they phoned each other 50 times. He said it was inaccurate for Geddings to characterize his business relationship with Middleton as something from the past.

Manning said the government misrepresented Geddings' relationship with Scientific Games. During the same time that his public relations company made $253,796 from the lottery vendor, Geddings' firm made more than $9 million from "scores of other clients."

Geddings helped Jim Hodges win the South Carolina governor's seat in 1998. He also masterminded an awarding-winning lottery campaign with TV ads featuring "Bubba," a Georgia convenience store manager who sarcastically thanked South Carolinians for spending millions on Georgia's lottery and benefiting Georgia public schools.

In 2005, Geddings worked for Scientific Games only twice, Manning said: once to help Sen. Tony Rand, a Fayetteville Democrat, prepare for a public forum on the lottery, and again on a radio advertising campaign.

Manning said Middleton terminated Geddings' contract with Scientific Games on Sept. 23, 2005, the day after he was appointed and two weeks before the first Lottery Commission meeting.

By that time, Manning said, Geddings no longer had a business relationship with the lottery vendor - a crucial point, Manning said, considering the wording of a question on a state ethics form for commission appointees.

"'Do you have,' is the way the form asks the question, 'any conflict of interest?"' Manning told jurors. He said Geddings correctly answered the present-tense question.

"The only thing (Geddings had to do) was to collect the money they had already done work for," Manning said.

The two outstanding payments came at an inopportune time for Geddings. Manning said Geddings had invoiced Scientific Games in June for pro-lottery radio ads made in May, but payment was sent to Geddings' old address in Columbia, S.C. For two months, invoices were exchanged before the payment was received.

"They screwed it up, and finally they got it right (and) the first one was deposited the day after Kevin agreed to serve as a lottery commissioner," Manning said. He said the same circumstances applied to another invoice for contract work from July and August.

"Guess what comes in the mail while Kevin Geddings is up here at a Lottery Commission meeting?" Manning asked. "There's a coincidence of timing that looks so awful," he said, "but really isn't so evil or sinister or so corrupt."

The trial resumes at 9 a.m. Monday.

Fayetteville Observer

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3 comments. Last comment 10 years ago by Tenaj.
Page 1 of 1
LOTTOMIKE's avatar - cash money.jpg
United States
Member #7853
October 15, 2004
11338 Posts
Posted: September 23, 2006, 6:55 am - IP Logged

i know the players of north carolina will be glad when the numbers games start and this trial is over with so the fun can begin.....

    livest's avatar - Lottery-025.jpg
    New Member
    Charlotte, North Carolina
    United States
    Member #18654
    July 16, 2005
    1 Posts
    Posted: September 23, 2006, 7:26 pm - IP Logged

    I always looked at the lottery as gambling...  and to gamble all the time is an addiction like with anything else, do people actually play the lottery like they're suppose to invest in their retirement?  I'm playing this week, but who isn't if it were up to me everybody would still have to drive to South Carolina Jester Laugh

      Tenaj's avatar - michellea
      Charlotte NC
      United States
      Member #17406
      June 18, 2005
      4053 Posts
      Posted: September 23, 2006, 9:19 pm - IP Logged

      I always looked at the lottery as gambling...  and to gamble all the time is an addiction like with anything else, do people actually play the lottery like they're suppose to invest in their retirement?  I'm playing this week, but who isn't if it were up to me everybody would still have to drive to South Carolina Jester Laugh

      What's up Charlotte.