D.C. officials learned last year that lax enforcement of security procedures made it possible for a handful of contract employees to steal tens of thousands of dollars in lottery tickets and prize money, according to records released this week in response to a Freedom of Information Act request filed with the District of Columbia Lottery & Charitable Games Control Board.

An investigation conducted by Battelle Memorial Institute in August 2006 determined the ticket thefts were most likely committed by field service technicians employed by Lottery Technology Enterprises, a District-based joint venture between GTECH Corp., New Game Technologies and Opportunity Systems Incorporated.

Lottery officials were first made aware of questionable ticket sales in December 2005, when several retail locations around the District began complaining about unauthorized ticket sales charged to their accounts. In nearly every case, the sales were recorded as occurring after the retailer's business hours. Surveillance footage and audits of ticket stock showed that no one was at the retailers' lottery terminals when the tickets were recorded as being sold.

Battelle, a technology consultancy, concluded that LTE technicians likely created the unauthorized tickets by manipulating the radio communications technology used to transmit ticket purchases from retail terminals to the D.C. lottery's central system. Battelle determined encryption security measures were not activated on some retailers's lottery terminals. LTE technicians thus were able to intercept the retailers' logon credentials, allowing them to gain remote access to some of these unsecured machines. Using spare lottery terminals, the thieves were then able to print genuine lottery tickets without having to pay for them, Battelle found.

In roughly 5,600 separate transactions over a seven-month period, the perpetrators tricked the system into thinking the purchases had been made by one of more than three dozen lottery terminals at authorized lottery retail locations throughout the District.

All told, the LTE technicians created $86,000 in phantom D.C. Lucky Numbers, D.C. 4, Keno and Powerball tickets, earning prize money totaling more than $70,000.

LTE officials did not return repeated calls for comment. A spokesperson for GTECH, a lottery hardware and software vendor based in Providence, R.I., declined to comment.

Jay Young, chief operating officer for the D.C. Lottery, said the board worked with the FBI to identify at least three LTE employees suspected of committing the fraud. LTE later fired the employees, but investigators could not gather enough hard evidence of wrongdoing to bring criminal charges against them.