Lottery winner goes from rags to riches to rags

Aug 22, 2007, 9:57 am (62 comments)

After the Big Win

For David Lee Edwards, winning the lottery was a wild rocket ride

In the fall of 2006, David Lee Edwards and his wife, Shawna, decorated their front door for Halloween. But if trick-or-treaters made it to the couple's home, a storage unit in Riviera Beach, no plastic ghost was as scary as what they'd have found inside: two pale, withered junkies from Kentucky living amid dirty clothes, rotting food, and their own filth.

And these were lottery winners.

Today, with David on what could be his deathbed and much of his $27 million prize squandered on big-boy toys and drugs, the saga of the Edwards clan is like the Beverly Hillbillies replayed as tragedy.

To a modern-day Euripides, the point would be that those whom the gods wish to destroy, they first make suddenly rich.

The Edwards' story is all the more compelling because of the distance the family traveled, like a rocket that shoots into space and, slowly at first, then faster and faster, tumbles back to Earth.

Liftoff happened toward the end of the summer of 2001, as much of the country was gripped by Powerball mania. Eighteen drawings had failed to produce a winner in 21 states and the District of Columbia. The Powerball pot had swelled to more than $280 million, the third-biggest in U.S. history.

On Saturday, August 25, David walked into Clark's Pump 'n Shop, a convenience store and gas station in Westwood, Kentucky. He was 46, a high school dropout, an ex-con who had robbed a gas station 20 years before. He'd spent a third of his life behind bars. Now he was on unemployment and owed child support. He had chronic back pain from a 1988 car accident. He lived nearby in Ashland, Kentucky — a fading steel town, population 25,000 — in a home without running water.

He spent $7 on lottery tickets.

That night, when winners were finally drawn, David was one of four, scoring $73.7 million. He could have taken that in annual payments of $2.9 million over 25 years — but that was perhaps too safe, too conservative. Instead, he took a one-time payout of $27 million.

On Monday, August 27, David appeared at the Louisville Slugger Museum in Louisville, Kentucky, to receive his ceremonial check. He had his long hair pulled back in a ponytail and was doing his best to look natural in a suit. Reporters peppered him with questions.

Yes, he'd made some mistakes in life, he said, speaking slowly, trying not to sound too country. Yes, he was no stranger to the inside of a jail cell — but from now on, folks could leave poor out of poor white trash when they referred to David Lee Edwards.

Shawna Maddux, his 27-year-old girlfriend, stood by his side. The mother of three boys, she had her own demons — she already had a history of substance abuse — but under the TV lights at the museum, she looked plump and healthy, if awkward.

"You know, a lot of people, they're out of work. Doesn't have hardly anything," David said solemnly.

"And so I didn't want to accept this money by saying I'm going to get mansions and I'm going to get cars, I'm going to do this and that. I would like to accept it with humility.

David and Shawna Edwards on their wedding day, Maui, 2002."I want this money to last, for me, for my future wife, for my daughter and future generations."

Then he said he had his eye on a Bentley. And Shawna wanted a Ferrari.

"We need a new everything," they said, one repeating after the other.

"We're going to be the new and improved David and Shawna," Shawna predicted.

The day he heard he'd won the lottery, David said, his ex-wife, Gail, remarried.

"Congratulations, hon!" he said, gloating.

The Edwards rocket was accelerating. David sought advice from lawyers in Ashland and hired James Gibbs, a 31-year-old Morgan Stanley broker, as his financial adviser. The first thing Gibbs did was arrange a $200,000 loan so David could celebrate in Las Vegas while awaiting the Powerball payment.

After six days in Vegas, David was broke, says Gibbs, speaking by phone from Ashland. (David Lee Edwards could not be reached to comment for this article.)

When his lottery payment came, on September 10, 2001, David was like a kid in a candy store — that is, a kid whose favorite treat was OxyContin, the narcotic painkiller.

When long-lost acquaintances turned up asking for money, David was generous.

His pals "went hog-wild," Gibbs says. "He actually had I don't know how many friends OD once he won the money, from him giving them money and them going and buying so much and doing so much drugs that they died. Then he would pay for their funerals. I would just sit there and cringe."

David decided he needed a new home, in a place where his wealth wouldn't be so conspicuous. So in November 2001, he bought a 6,000-square-foot house in a gated golf and tennis community in Palm Beach Gardens. Price: $1.5 million.

David began to travel back and forth from Florida to Kentucky. On several occasions, he spent $8,500 for a private flight. He sometimes brought an entourage.

This was torture for Gibbs: "I'd be over there grittin' my teeth, with the calculator, saying, 'David, you gotta stop this.'

"He'd make fun of me to his friends — like, 'Look, I've got him so pissed off right now, he can't see straight!' "

In three months, David had spent $3 million, Gibbs says.

On New Year's Day, David and Shawna were married in Maui.

David's 11-year-old daughter, Tiffani, decided she wanted to move to Florida with him. The girl's mother, Gail Blanton, said OK. "I figured she'd just come right back home," Blanton says, speaking by phone from Ashland. "But she didn't."

Gibbs says David paid Blanton $500,000 to let Tiffani join him.

Blanton says she did get some money from her ex but not that much. She declined to be more specific.

David enrolled Tiffani in the Benjamin School, a private college prep school in Palm Beach Gardens, where annual tuition is more than $16,000. She was too young to drive a car, but she could cruise their neighborhood in a $35,000 Hummer golf cart that David gave her.

David liked vehicles. He bought a Chevrolet camper van. He also bought a Lamborghini Diablo. He had more than a million dollars' worth of wheels parked in front of his Palm Beach Gardens home. People came to stare. Neighbors complained that it looked like a car dealership over there.

In interviews, David boasted about his purchases. He told NBC News that he paid $78,000 for the gold-and-diamond watch on his wrist and $159,000 for the ring he wore. And there were the 200 swords in his collection of replica medieval weapons. And the plasma TV that he said set him back $30,000.

Susan Bradley is an expert in sudden wealth. "If you look at the things he was buying, they were pretty random," she says. "He was a sitting duck for all sorts of 'deals.' If you watch him for ten seconds and you're a predator type, you've got his number."

Meanwhile, Shawna's drug use was ballooning. She was doing crack and bouncing between their Palm Beach Gardens home and rehab and hospital stays. David gave her trinkets such as the $34,000 Rolex watch that she pawned to buy more drugs.

David also bought a $600,000 house in Palm Springs, California. And his own limo company. And a $1.9 million Lear jet. And three racehorses. And a fiber-optics installation company, which he acquired for $4.5 million.

A year after he'd won the lottery, he estimated he'd spent $12 million.

And his back still hurt.

The rocket was reaching its apogee.

David Edwards poses for police, 2006.At some point, David Lee Edwards got involved with another adviser, Jeffrey Chandler. In March 2003, David sued Chandler, claiming Chandler had bilked him out of $1 million. (The suit was ultimately settled out of court. Chandler could not be located to comment for this article.)

Early in 2002, Chandler embarked on a calculated ploy to win his confidence, David contended. His private pilot introduced the two men, he said, and he hired Chandler as a business consultant in June of that year, paying him $5,000 a week.

David put Chandler in charge of his fiber-optics company, World Solutions. Once there, David said, and unbeknownst to him, Chandler raised his own salary by $7,500 a week, to $12,500. Chandler told other employees to deal directly with him, cutting David out of the loop, David charged. He said Chandler played the company like a violin, using its funds to pay his personal expenses such as credit card bills and legal fees. At the same time, David said, Chandler persuaded him to put another $1.75 million into World Solutions.

Not long after he sued Chandler, David filed for divorce. Process server Paul Scholtes delivered the summons to Shawna at the DoubleTree Hotel in Palm Beach Gardens and noted that she looked ragged and had a black eye. But she had a diamond on her finger, and she was still plump.

David and Shawna reconciled. A few months later, her mother asked a state judge to involuntarily commit Shawna to a substance-abuse treatment program. Shawna had entered 12-step programs at more than half a dozen separate facilities at that point. Getting money for drugs was no problem. Rather, the money was the problem. There was still too much of it.

In a July 2003 hearing, David said that on several occasions he'd found Shawna passed out in their home with a syringe in her arm. Still, he noted, she seemed to have done well at Passages, a rehab center in Malibu, California. David paid $80,000 for her 60-day stay there.

In March 2004, David asked a judge to commit Shawna to a rehab program. He was afraid she'd die of an overdose, he said. Her drug use had become "extreme." She'd asked to be locked up as a way to control her urges, he said.

Her detox physician, Dr. Ross Glider, said Shawna was consuming as many as 50 80-milligram OxyContin pills a day, an extremely high amount — so high, Glider said, that she might have suffered brain damage.

The next month, David took out a $500,000 mortgage on their Palm Beach Gardens home. That May, he opened it to a TV crew, which documented his crystal collectibles and replica medieval armor, his life-sized statues of the Blues Brothers. "If I run out of every dime, it's been one heck of a ride, and I got to help a lot of people," David told the camera. "So at the end of the day, if it all went away, I'd be happy."

In October of that year, police were called to the Edwardses' Palm Beach Gardens home, responding to a domestic violence report. Shawna was just out of rehab again. David had found her with a crack pipe in the laundry room. She stabbed him with the pipe, he told police. She kicked him in the chest, he said, and he fell to the floor, numb, unable to walk.

David crawled out of the house and yelled for help.

David tried to curtail his own drug use, friends say, but Shawna led him back to it.

The rocket was falling.

In September 2005, police were called to the Edwards residence in Palm Beach Gardens, this time for a child welfare complaint. In addition to Tiffani Edwards, David and Shawna had custody of the youngest of Shawna's three sons, 7-year-old Matthew.

Officer Jennifer Prendergast described a creepy scene in the Edwardses' master bedroom, with used syringes everywhere. The officers also found 3.7 grams of cocaine.

Shawna began chattering about her drug problem and David's. The pair would frequently lock themselves in the bedroom to shoot up, she told Prendergast. And now they had hepatitis.

Glider, the detox physician, visited them at home, Shawna said, and prescribed drugs for them. Two bottles of OxyContin prescribed by Glider were in the bedroom. (New Times was unable to locate Glider for comment.)

The children weren't enrolled in school. Each could describe the parents' drug use in detail. They were placed in foster care for nine months. Tiffani eventually returned to her mother's home in Kentucky.

Shawna Edwards poses for police, 2006.Shawna and David pleaded guilty to drug-possession charges and avoided jail.

That same month, the BallenIsles Community Association placed a lien on their Palm Beach Gardens house because David owed $2,599.81 in maintenance fees and interest.

In December, Bank of America sued David to recover $170,787.74 that he owed on his Visa card.

In April 2006, the community association forced the Edwards house into foreclosure; by now, David owed the association $8,642.75.

In May, high-end real-estate investors Gerti Kleicamp and Alfons Schmitt bought the Edwards home for $900,000, plus the late maintenance fees. When Kleicamp took possession of the house in early June, David was still in it.

She had him physically removed.

The rocket was falling faster.

It didn't take long for business owners at the warehouse complex in Riviera Beach to notice that Shawna and David Lee Edwards were living in Unit 4.

Before he lost his home, David used the warehouse space to store furniture and cars. Rent was $2,624.16 a month. David was often late with it, and garnered eviction notices on several occasions before he paid up.

The couple was liquidating assets, but the fresh income never seemed to last more than a few days.

Although he was no longer David's financial adviser, James Gibbs continued to help him, he says, sometimes by lending David money, and sometimes by selling his belongings for him. With frustration in his voice, Gibbs recalls what happened last year after he helped David unload a directional drill from the by-now-defunct fiber-optics company. He says he wired Edwards $20,000 from the sale on a Friday, and the money was gone the following Tuesday.

"If they get more money, then they spend it like they still have millions of dollars," Gibbs says.

After they lost their Palm Beach Gardens home, David and Shawna began to spend weeks at a time in the warehouse, sometimes without electricity.

Used hypodermic needles littered the parking lot near their unit. Shawna borrowed phones from neighboring businesses to make calls. David would hit up the neighbors for 20 bucks now and then. Sometimes the couple would fling open the rolling metal doors of their unit for all to see the mess inside.

"It didn't look like a good scene over there," says Andrew Goodyear, owner of Movin' on Mobility in Unit 5.

On July 31, 2006, Shawna was pulled over while driving their brown Chevy van on Okeechobee Boulevard. Officer Sean McMichael found two pieces of crack in her purse. Booked for drug possession, she was jailed for a month.

On August 2, David was stopped for a traffic violation while driving a U-Haul truck.

Officer Robert Wilson of the Palm Beach Gardens Police Department saw clothing, furniture, and boxes in the truck. Edwards said it was the contents of his house. Officer Wilson also discovered 1.3 grams of crack in David's possession, plus a crack pipe, two hypodermic needles, and half a gram of heroin.

"I ran out of my medication," David told the officer, "and I needed something for the pain."

Examining some of the many items found the Edwards' warehouse space.He was booked for drug possession. On the arrest report, he's described as homeless.

Later that month, Kleicamp discovered that David owed Palm Beach County $50,849.63 in back property taxes for 2004 and 2005. She tried to get that money from him but couldn't. (Kleicamp later flipped the house for $2 million.)

Warehouse living didn't do much for David Lee Edwards' health. Friends say that he doesn't have health insurance and that area hospitals were tiring of him.

At the beginning of 2007, Shawna drove David to Orlando in their brown van and checked him into a hospital. He could barely walk.

Not long after that, David's ex-wife, Gail Blanton, and her husband, Jimmy, drove David back to Kentucky.

Around the same time, in January, the owners of David's rented Riviera Beach warehouse demanded possession of the unit for lack of payment.

In March, Shawna Edwards was picked up by police near Orlando for failure to pay $17,000 in child support to the father of two of her children.

On April 4, David's attorney in his drug case, Michael Salnick, told a Palm Beach County judge that he had been unable to communicate with his client since February 13. David was in an Ashland, Kentucky hospital, Salnick said, recuperating from "an intensive surgical procedure."

On July 14, the contents of David's warehouse unit were auctioned to the public. Auctioneer Doug Holladay estimated that the 104 items were worth $160,000. It was "high-end reproduction stuff," Holladay said. David "wasn't educated in the finer things, that's for sure."

Hundreds of people came to the auction. Most were simply curious. The warehouse, lacking air conditioning, was broiling that day.

Mario Lequerique, a tiki-hut builder and antiquities dealer from Royal Palm Beach, bought a pair of carved granite sphinxes for $2,750. He figured they were worth at least $7,000. Like most of the attendees, Lequerique had a theory about how Edwards lost his fortune. "If you didn't work for it, the money doesn't mean anything," he said.

Holladay said the warehouse unit was filled with human excrement when David and Shawna left it, even though it had a working bathroom.

The couple also left behind their wedding album.

Tacky treasures: A hand-carved white marble fireplace mantel with cherubs (estimated value $19,000) and flimsy fake medieval armor ($125) were among the oddities that were auctioned after David and Shawna Edwards abandoned the warehouse.On July 24, David missed another court appearance in West Palm Beach. Another attorney said that David was still in Kentucky and that he had an "infectious blood disease."

Folks in Ashland say David Lee Edwards is flat broke now. And he can't move his legs.

He made this bed for himself, says his ex-wife, Gail Blanton. She says she hopes he recovers, and that she wishes he had set aside some of the money for Tiffani, now 17.

"If he followed my advice," says James Gibbs, his former financial adviser, "he'd be pulling in about $85,000 a month for the rest of his life."

Gibbs says he put about $16 million of David's winnings in bonds and annuities, to protect David from himself. David cashed them out.

Vernon Holbrook, an Ashland used-car dealer, has known David since the 1950s, when Holbrook worked with David's father at a steel mill. Over the years, Holbrook says, he grew to think of David as a son, and David regarded him like a father. Holbrook says he knows the lottery money is gone because David borrowed money from him and hasn't repaid it.

"He got me for — let me see — I Western Unioned them six, seven thousand dollars," Holbrook says. "I got the tickets here in the drawer, 19 of 'em."

David and Shawna may have a few assets left. To post bail in Kentucky in her child-support case, Shawna produced the deed to a $250,000 Ashland home that she co-owns with her mother free and clear. Once she was released from jail, she said, she could get a home equity loan and pay the back child support. But within 24 hours of her July 18 release, Shawna failed a drug test.

The following Monday, deputies found her at David's bedside at King's Daughters Medical Center in Ashland.

Holbrook says that he speaks with David nearly every day and that the outlook is grim. "I'd say he's on his deathbed, really," he says.

Holbrook chuckles.

"You can't really feel too sorry for somebody who blows millions of dollars."

Broward-Palm Beach New Times



Sad story, but stupid is as stupid does...



justxploring's avatarjustxploring

Quote: Originally posted by DoubleDown on Aug 22, 2007

Sad story, but stupid is as stupid does...

I agree, Forrest.

MissNYC's avatarMissNYC

Wow what a sad story. What a waste!

Bradly_60's avatarBradly_60

wow what a story.  You have the stories of how nice people make off with their money and then you have stories like these and good old Jack's. 

I actually remember this drawing and seeing this guy on tv.  Sad, sad story.

"If he followed my advice," says James Gibbs, his former financial adviser, "he'd be pulling in about $85,000 a month for the rest of his life."  I just can't see how you could throw away $27,000,000.  I didn't really think it was possible but now I am proven wrong.  It sad that this is an all to common story of lottery winners.


Coin Toss's avatarCoin Toss

It solunds like bad moves from the very get-go:

From the article:

The Edwards rocket was accelerating. David sought advice from lawyers in Ashland and hired James Gibbs, a 31-year-old Morgan Stanley broker, as his financial adviser. The first thing Gibbs did was arrange a $200,000 loan so David could celebrate in Las Vegas while awaiting the Powerball payment.

So you're unemployed, hit Powerball, and make a $200,000 loan to go to Vegas? I'll bet the wise guys in Vegas were betting among themselves on what the Over / Under would be on this guy blowing it all. 

tnlotto1's avatartnlotto1

thanks for posting this story i wondered what happened to him because the lottery story on tv talked about them losing the home and i wondered where he ended up.

MichiganHopeful's avatarMichiganHopeful

This is a horrible story. I remember seeing this guy on TV a few months ago. He was doomed from the start! How do you spend $3 million dollars in 3 months??? That is just absurd! Every story that I read that has this type of ending shows the power of money in the hands of a moron. I hope that if I ever win the jackpot, I will be able to maintin enough humility and sense to control the urges to overspend. The items that this guy purchased just made no sense at all. Mr. Gibbs, his first financial advisor, seems like he was a straight shooter. In the article, it reads as if he really cared and tried to help this guy maintain his money. It's not the money that was the problem, it was the person that the money was given too. This story just makes me sick! It's very depressing...*sigh*

time*treat's avatartime*treat

...James Gibbs, a 31-year-old Morgan Stanley broker, as his financial adviser. The first thing Gibbs did was arrange a $200,000 loan so David could celebrate in Las Vegas while awaiting the Powerball payment...

I wonder how many people would want this guy as their "financial advisor" if they knew how freely he was willing to discuss his clients' dealings.

Coin Toss's avatarCoin Toss

I'm pretty sure this was after-the-fact. A lot of people wouldn't say anything to the press if you read the OP. 

I think this financial adviser is telling the story to give future winners a serious heads up.

And think about this from the OP:

"To a modern-day Euripides, the point would be that those whom the gods wish to destroy, they first make suddenly rich."

Man, talk about distrubing! 

Jill34786's avatarJill34786

Very sad but typical of those who come into sudden wealth.


Yet another example of how money does not change people (though it can change how people treat you).  A person who abuses booze and drugs, who commits crimes, and makes bad choices with their life is likely to continue to do that with lots of money in the bank.  I once heard a jackpot winner say "If you were miserable before the win, you will be miserable after the win."  How true. 

Of course, if he had let the lottery invest the cash amount - BEFORE taxes - he would have received his annual check for $3.7 million this month - no matter what the stock market was doing.

justxploring's avatarjustxploring

I agree with the remark about the financial advisor, but it's possible that Mr. Edwards insisted on taking out the loan.  I don't trust all financial advisors, but I also know from experience that you can't stop someone from being irresponsible.  When I sold cars or furniture, people who didn't have a pot to pee in would want to finance all sorts of luxuries.  I learned the hard way that trying to help people will make you poor.  Once a couple drove into the dealership with a car that had only 30K miles on it, and they were very upside down. So I told them it would be more prudent to wait another year or 2 and explained how, no matter how good a deal I gave them, they would be paying thousands over sticker price, since a new car depreciates the most during the first 24 months.  They thanked me and left.  A week later they came back, so I thought they changed their mind. They wanted to show me the new car they purchased up the road.  (I have no idea why they came back to was like kicking me in the teeth.)   After that, I decided to be fair & honest, but to let adults make their own stupid choices.

Chuck & I posted at the same time, so I want to add that I agree with him.  I don't think it's typical to hear these stories.  I am 100% positive that if I won even a million dollars, I'd be set for life.


Quote: Originally posted by Jill34786 on Aug 22, 2007

Very sad but typical of those who come into sudden wealth.

Typical?  There have been over 220 Powerball jackpot winners.  I only know of two that have had problems with their lives (other than the occaional paint chip on the Maybach).

The press loves to tell stories of "lottery winners" who have problems.  Many of these big winners actually won prizes in the hundreds of thousands and do quickly go through it.  You are not likely to see a big story on the thousand of winners who buy a new home, send their kids to college, start a business, take lots of nice trips (yawn). 

That jackpot winners have tragic lives is a myth used to sell some media show or to sell slick finanical services (like the folks who put out their suvey findings that 90% of winners have spent their entire lottery winnings within five year - yeah right! - literally true if you are talking about the $5 winners). 

This is a news story because it is unusual.

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