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California lottery retailers investigated for massive prize claims

California LotteryCalifornia Lottery: California lottery retailers investigated for massive prize claims
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SAN JOSE, Calif. — Are California Lottery retailers beating the odds, or is there something more going on?

A local media investigation found some store owners cashing in winning lottery tickets at surprising rates.

It's one of the winningest lottery stores in the Bay Area:  Dolce Espresso in San Jose has reported 212 winning tickets worth $600 or more in the past decade. The luckiest winner is owner Minh Nguyen. He's claimed 87 of them.

At the Jelly Donut in Daly City, owner Frank Huynh claimed 15 winning Scratchers worth a thousand bucks each, in just the past two years.

And Angela Kouch and her frequent customer Jose Ruiz combined: A whopping 380 wins at her store, MJB Video in L.A.

Notice a theme? Data obtained from the California Lottery shows many of the most frequent winners in California are retailers.

"I definitely would say that some of them defy the odds," said Skip Garibaldi. He's a mathematics professor at UCLA, and an expert on the lottery.

He crunched the numbers for us, and estimates that if these store owners are really buying their own tickets, they're spending a fortune.

Like Frank Huynh at the Jelly Donut: "Over his 642-day span of collecting prizes I think he was spending about $1,300 a day," said Garibaldi. That's $840,000 total to win $32,000.

Numbers like that he says are improbable: "You can get lucky once, you can buy a mega millions ticket and you can win. But if you win twice you either spent a lot of money or something is up," said Garibaldi.

The lottery's chief enforcement officer, Steve Tacchini said something called discounting may be at play.

That's when customers sell their winning tickets to the retailer for less than they are worth. "People have liens or judgments, could be child support payments. They know if the tickets go into a claim, part of that will be garnished. Unfortunately there are some unscrupulous retailers out there that take advantage of these situations," said Tacchini.

Like at MJB video. After half an hour of denials and excuses owner Angela Kouch finally fessed up: I just help the people, but I don't make any one penny on customer," she said.

Tacchini said claiming a ticket that is not really yours is a violation of lottery regulations, it's not a crime.

But another way some retailers could be claiming so many wins is criminal: They could be cheating unsuspecting customers. In stings conducted randomly across the state, lottery investigators posing as customers use a decoy winning ticket to test the retailers' honesty.

Tacchini says the bad apples are a minority. "We have 22,000 retailers and the routine testing we do has them at 98 to 99 percent compliance," he said.

He said the lottery has tightened regulations to stop retailer cheating. Now all winners of $600 or more have to disclose if they are owners or employees of stores. The new rules went into effect in 2007, the very year Minh Nguyen's winning streak abruptly ended at Dolce Espresso.

He didn't want to talk about it, and even denied he plays the lottery at all, even though his name and the name of his store are clearly on the lottery's database.

Same story at the Jelly Donut. Owner Frank Huynh at first denied he plays Scratchers then told us it was his wife. He also denied ever buying discounted tickets from his customers.

Ali Ibrahim, owner of Hi-Crest Liquor & Junior Market in Garden Grove, is also winning big.  Ibrahim and his family have cashed in almost all the big winners purchased at his store — more than $300,000.

In the lottery business, winning tickets of more than $600 are called taxable tickets, because prizes of $600 and more have to be cashed at the California Lottery District Office. There, officials will take out federal taxes and any child support or money owed to the state.

Ibrahim is on the list. He won $600 or more 192 times and has gleaned more than $300,000. Most of it came from tickets purchased at his own store; Ibrahim won 142 of the 188 winning tickets at Hi-Crest.

If you include his relatives — they won 166 of the 188 winning tickets — purchased at Hi-Crest, which comes out to 88 percent of the winning tickets.

Garibaldi calculates that Ibrahim must have spent about $2 million on Hot Spot, which is his preferred game.  $2 million to win $304,000.

At California Lottery headquarters in Sacramento, security officials say Ibrahim's frequency of winnings certainly has put him on their radar — more than once.

"We've probably done at least 10 investigations in that location ... because we want to test the integrity of the retailer," said Stephen Tacchini, the deputy director of law enforcement for the State Lottery and the former chief of the San Francisco Police Department.

He said they haven't caught Ibrahim doing anything wrong, but they're watching.

"I can draw some conclusions, but there's nothing we found that he's doing wrong. He may be purchasing tickets from customers, which is a violation of our regulations. We know that does occur," Tacchini said.

That's one reason why retailers' names are near the top of the list for suspicious winners.

Experts say they've been known to purchase winning tickets for 50 or 75 cents on the dollar, if the winner is trying to avoid paying taxes or debts. That's against the rules.

Lottery officials also conduct stings in which an undercover officer posing as a customer hands a clerk a winning ticket, only to have him come back and say it's a loser.

Some retailers are also known to gamble more than others, which is why they may win. And when they do, they say it's just their lucky day.

Or is it?

Bill Hertoghe was the former head of security for the California Lottery.

" 'Lucky,' I hear that a lot, yeah," Hertoghe said. "In my experience, they're not that lucky. And if they are, they shouldn't be just retailers. They should be professional gamblers."

He believes some retailers are buying tickets or scamming winners. The Lottery said it has a security force to crack down on those who are skirting the rules.

Critics said these people are beating the odds so much so they may be too lucky.

Lottery officials said that without absolute proof, it's difficult to break the contracts with retailers. In fact, they've been sued for doing so in the past.

CBS, Lottery Post Staff

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20 comments. Last comment 2 years ago by majestic1070.
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JackpotWanna's avatar - squiz

United States
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Posted: October 31, 2014, 2:05 pm - IP Logged

Wow! "840,000 total to win 32,000."  Unreal.

    whiteballz's avatar - Lottery-015.jpg
    Nutley, New Jersey
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    August 1, 2012
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    Posted: October 31, 2014, 2:51 pm - IP Logged

    Wow! "840,000 total to win 32,000."  Unreal.

    "Garibaldi calculates that Ibrahim must have spent about $2 million on Hot Spot, which is his preferred game.  $2 million to win $304,000." OMG....

    .

      RJOh's avatar - chipmunk
      mid-Ohio
      United States
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      March 24, 2001
      19831 Posts
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      Posted: October 31, 2014, 3:10 pm - IP Logged

      " 'Lucky,' I hear that a lot, yeah," Hertoghe said. "In my experience, they're not that lucky. And if they are, they shouldn't be just retailers. They should be professional gamblers."

      Sounds like anyone who wins more than $600 could classify themselves as "Lucky" if those calculations of what they need to spend to win are correct.  I doubt players winning and spending that much  would gain much of an advantage by classifying themselves as professional gamblers since they could deduct most of the expensive anyway as none professional gamblers.

       * you don't need to buy more tickets, just buy a winning ticket * 
         
                   Evil Looking       

        Avatar
        Kentucky
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        Posted: October 31, 2014, 3:29 pm - IP Logged

        These California investigators don't get out much because we've discussed the "10 percentors" in many other states for a couple of years now. And even Dateline NBC had stories on it. The accumulative totals might seem impressive, but the highest value of any individual ticket is usually way under $10,000. When a player start cashing multiple $100,000 plus value tickets there might be a story, but until then it's obvious some retailers are buying winning tickets from players at a discount.

          music*'s avatar - nw bookeep.jpg
          Happy California
          United States
          Member #157856
          August 2, 2014
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          Posted: October 31, 2014, 4:24 pm - IP Logged

           The Lottery Commission should change the contracts too make it easier  for them to investigate wrong doing. If there is smoke then there is usually fire.

            Happy Halloween LP members & staff.  LOL

            pickone4me's avatar - 021414tvlies zpsa453b327.jpg
            Wisconsin
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            Member #104962
            January 23, 2011
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            Posted: October 31, 2014, 5:28 pm - IP Logged

            How very interesting, and unsurprising.

              Avatar

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              Posted: October 31, 2014, 9:05 pm - IP Logged

              I guess loosing most of the time is no problem and that is completely legal.

                noise-gate's avatar - images q=tbn:ANd9GcR91HDs4UJhjxO7cmeMQWZ5lB_FOcMLOGicau4V74R45tDgPWrr
                Bay Area - California
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                December 12, 2012
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                Posted: October 31, 2014, 9:53 pm - IP Logged

                These California investigators don't get out much because we've discussed the "10 percentors" in many other states for a couple of years now. And even Dateline NBC had stories on it. The accumulative totals might seem impressive, but the highest value of any individual ticket is usually way under $10,000. When a player start cashing multiple $100,000 plus value tickets there might be a story, but until then it's obvious some retailers are buying winning tickets from players at a discount.

                Actually they do get out much Stack- this Tacchini guy is a pit bull. A few years back he took Chris Hansen from " To catch a predator" on a ride along to nail some of these rogue vendors who were not playing by the rules. They were confiscating their equipment right there and then sending a clear message to all.If l recall correctly, they were sending folks in with genuine scratcher tickets specifically manufactured with amounts of " $500.00" and asking the clerks if they had won anything- some clerks said " No".. others were saying - " Yeah you won, but its only $50.00 ".Next thing you know, Chris is standing at the counter with his binder and a camera crew asking the clerk to repeat what he just told an undercover lottery agent.

                In fact when Chris decided to visit other States and see how they were keeping tabs on vendors- their State lottery Officials turned him down flat. Florida was the one that went after these vendors in the early part of this year and California is following suit. l have yet to hear of other States enforcing this.

                  Avatar
                  Kentucky
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                  Posted: November 1, 2014, 12:58 am - IP Logged

                  Actually they do get out much Stack- this Tacchini guy is a pit bull. A few years back he took Chris Hansen from " To catch a predator" on a ride along to nail some of these rogue vendors who were not playing by the rules. They were confiscating their equipment right there and then sending a clear message to all.If l recall correctly, they were sending folks in with genuine scratcher tickets specifically manufactured with amounts of " $500.00" and asking the clerks if they had won anything- some clerks said " No".. others were saying - " Yeah you won, but its only $50.00 ".Next thing you know, Chris is standing at the counter with his binder and a camera crew asking the clerk to repeat what he just told an undercover lottery agent.

                  In fact when Chris decided to visit other States and see how they were keeping tabs on vendors- their State lottery Officials turned him down flat. Florida was the one that went after these vendors in the early part of this year and California is following suit. l have yet to hear of other States enforcing this.

                  Tacchini said claiming a ticket that is not really yours is a violation of lottery regulations, it's not a crime.

                  My neighbor handed me $10 and I bought him two Monopoly tickets and handed him the tickets so I'm pretty sure those two tickets are really his. How can a ticket in a player's hand and signed not be really theirs?

                  I'm not talking about clerks short changing players, but the players with real winning tickets that sell them for lesser amounts. If buying tickets for someone else is legal, the only difference between buying tickets for other players and selling a winning ticket is the value of the ticket is known. The winning amounts are usually way under $10,000 making investigations trying to prove who really bought the ticket from the terminal next to impossible. Are California lottery tickets bearer instruments?

                  If the pit bull is correct, no lawyer could claim the winnings on behalf of trust because the ticket "is not really their".


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                    Posted: November 1, 2014, 10:35 am - IP Logged

                    The Federal government should just ban all lotteries in California.  Nothing but filthy cheats...all of them.

                      noise-gate's avatar - images q=tbn:ANd9GcR91HDs4UJhjxO7cmeMQWZ5lB_FOcMLOGicau4V74R45tDgPWrr
                      Bay Area - California
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                      Posted: November 1, 2014, 11:58 am - IP Logged

                      Tacchini said claiming a ticket that is not really yours is a violation of lottery regulations, it's not a crime.

                      My neighbor handed me $10 and I bought him two Monopoly tickets and handed him the tickets so I'm pretty sure those two tickets are really his. How can a ticket in a player's hand and signed not be really theirs?

                      I'm not talking about clerks short changing players, but the players with real winning tickets that sell them for lesser amounts. If buying tickets for someone else is legal, the only difference between buying tickets for other players and selling a winning ticket is the value of the ticket is known. The winning amounts are usually way under $10,000 making investigations trying to prove who really bought the ticket from the terminal next to impossible. Are California lottery tickets bearer instruments?

                      If the pit bull is correct, no lawyer could claim the winnings on behalf of trust because the ticket "is not really their".

                      You forgetting that we dealing with California Stack- things are done differently here mate. If Tacchini said anything that was not in harmony with the rules & regs of the lottery out here, he will be educated on it. I do know that the lottery stresses that the bearer of his or her  ticket " sign the back " to ensure " Ownership"- take that statement for what it's worth.

                      We have a different set of drummers out here- but you knew that already..Big Smile

                      People who say it cannot be done should not interrupt those who are doing it- George Bernard Shaw.

                        TnTicketlosers's avatar - Lottery-065.jpg

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                        Posted: November 1, 2014, 2:02 pm - IP Logged

                        I wish someone could answer my question,why can some states win more than others.scratch offs and draws,,,,why can Georgia and Florida pay out so much more than Tennessee..Im so sick of losing...Everyone in Tennessee feels the same way I do.

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                          Kentucky
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                          Posted: November 1, 2014, 4:20 pm - IP Logged

                          You forgetting that we dealing with California Stack- things are done differently here mate. If Tacchini said anything that was not in harmony with the rules & regs of the lottery out here, he will be educated on it. I do know that the lottery stresses that the bearer of his or her  ticket " sign the back " to ensure " Ownership"- take that statement for what it's worth.

                          We have a different set of drummers out here- but you knew that already..Big Smile

                          I Agree!

                          The article starts out about lucky players and some players defying all odds and then has Tacchini explaining what he calls discounting. He then goes on to say "claiming a ticket that is not really yours is a violation of lottery regulations, it's not a crime.", which doesn't make much sense in the context of discounting because the ticket really does belong to the person who bought it for less face value.

                          Experts say they've been known to purchase winning tickets for 50 or 75 cents on the dollar, if the winner is trying to avoid paying taxes or debts. That's against the rules.

                          The problem is proving the winner is avoiding back taxes or child support, which should be the point of the article, but the writer barely touched on that.

                            RJOh's avatar - chipmunk
                            mid-Ohio
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                            Posted: November 1, 2014, 4:32 pm - IP Logged

                            I wish someone could answer my question,why can some states win more than others.scratch offs and draws,,,,why can Georgia and Florida pay out so much more than Tennessee..Im so sick of losing...Everyone in Tennessee feels the same way I do.

                            Stick with muli-state games like PB,MM and hot Lotto and you'll know the payouts are the same as every other state except California.  I suspect your pick3 and pick4 payouts are similar to other states too.

                             * you don't need to buy more tickets, just buy a winning ticket * 
                               
                                         Evil Looking