Welcome Guest
Log In | Register )
You last visited March 24, 2019, 3:43 am
All times shown are
Eastern Time (GMT-5:00)

The man who won the lottery 14 times (part 2)

Share this news story on Facebook
Tweet this news story on Twitter
Insider BuzzInsider Buzz: The man who won the lottery 14 times (part 2)
53
Rating:

Just after 11 PM on February 15, 1992, a lottery ball machine at the Virginia State Lottery HQ spit out 6 winning numbers on live television: 8... 11... 13... 15... 19... 20.

In the coming days, officials would find out that one "person" had secured not only the $27,036,142 jackpot, but 6 second prizes, 132 third prizes, and 135 minor prizes collectively worth another $900k.

What unfolded next was the strangest, most improbable lottery tale in history — one involving thousands of international investors, dozens of complex computer systems, and a mathematical savant who'd masterminded the entire operation from the other side of the world.

This is the story of the man who "gamed" the lottery by buying every possible combination.

If you have not yet read Part 1 of this story, stop right now and head over to The man who won the lottery 14 times (part 1).

Part 2

As Mandel knew, the "buy all combinations" method of winning the lottery was more of a logistical than a financial challenge. The hard part was yet to come.

Tickets could be legally printed at home, but they still had to be taken to an authorized lotto retailer in the US, paid for (at $1 each), and processed. Waltzing into a gas station with 7m tickets and a truckload of cash wasn't an option.

Mandel hired the accounting firm Lowe Lippmann to transfer $7.1 million in investor funds to Crestar Bank in Virginia, where it was cut into $10k cashier's checks. He then lined up advance deals with Virginia-based retail chains to buy the tickets in bulk. All he needed was a point-person on the ground to orchestrate the mayhem.

For this task, Mandel turned to an esteemed associate by the name of Anithalee Alex.

Perennially outfitted in a gold rolex and a safari suit, Alex was a sweet talker who could "make the world seem like a bed of roses." An ex-paratrooper turned Rolls Royce salesman turned oil prospector, he could often be seen gallivanting around his small town of Teutopolis, Illinois, in a t-shirt that read: "Please Lord, let me prove to you that winning the lottery won't spoil me."

When his old pal, Mandel, rang, Alex was fresh out of bankruptcy court, with $400k in debt and 16 maxed-out credit cards. He was ready for action — any action.

The job was harrowing: He was to coordinate the drop-off, payment, and processing of 7 million lottery tickets at hundreds of stores all over Virginia.

The jackpot hit $27 million on a Wednesday; the next draw would be on Saturday. This meant that he and his team had just 72 hours to pull it off.

A logistical nightmare

On February 12, 1992 — 3 days before the draw — Alex checked into a Holiday Inn in Norfolk, Virginia and set up a "command center" at the Koger Center, a nearby business park.

In the "88-acre "maze of buildings," Alex assembled a team of 35 couriers (most of whom were certified accountants) and distributed cellophane-wrapped bundles of 10k tickets with stacks of $10k cashier's checks.

"Think of it like an office pool," he reportedly told the CPAs, "except a larger office pool."

For 2-straight days, the couriers methodically descended on 125 gas stations and supermarkets. At Farm Fresh, Miller Mart, and Tinee Giant locations throughout the region, flummoxed store clerks were asked to buy and process millions of algorithmically-generated lotto tickets.

"We thought they were nuts," Rick Miller, a local gas station proprietor, later admitted. "But if someone comes up and says they want to buy 700k lottery tickets, we're not going to chase them away."

A representative at Farm Fresh, who bought 2.4 million of Mandel's tickets, had a more spirited take: "For someone to try to do this ticket-by-ticket is a very chancy proposition," he said. "But that's what lotto's all about."

By Saturday evening, the team was nearing completion. Then, disaster struck.

One of the chains who'd bought tickets in bulk got overwhelmed and quit in the final hours, leaving millions of combinations on the table. When the deadline for entry arrived, only 5.5 million of Mandel's 7 million tickets (78%) had been processed. Mandel's "fool proof" plan, which relied on securing every single possibility, was in jeopardy.

Like a regular lottery, winning the jackpot would ultimately come down to luck.

"The most incredible thing in the world"

Mandel knew that without 100% of the combinations secured, his strategy was reduced to a multi-million dollar game of chance.

He was aware of other ill-fated attempts to game a US lottery by bulk-buying tickets: In a 1990, a Sacramento retiree bought 30k tickets with a diaper bag full of cash and walked away empty-handed; months later, a computer engineer known as "The Phantom" purchased 80k combinations at a Jacksonville, Florida bar and only won minor prizes.

Even if Mandel were to win, there was the possibility of multiple winners — a scenario that could significantly dilute the jackpot.

At 11:20 PM on February 15th, the numbers were drawn on live television. I nearby warehouse, Alex and his team frantically rifled through 5.5 million physical copies of receipts, looking for the winning ticket.

Then, piercing through the carnage, a victorious shout: They'd won.

"When the $27 million ticket came up, everybody was 6 feet off the ground," Alex later said. "It was the most incredible thing in the world." Purchased at a Farm Fresh in Chesapeake, the ticket had been processed in the twilight hours. Alex's diligence had paid off.

From his home in Australia, Mandel sent out a short message to his 2,524 investors: "One of our target lotteries did jackpot to our required level," he wrote. "We entered and won."

The $27,036,142 jackpot (and $900k in secondary prizes) was to be paid out in 20 annual installments of $1.03 million. But Virginia's lottery czars had other plans.

What would Thomas Jefferson say?

Although completely legal under both US and Virginia state law, the Australian group's feat was interpreted as an effort "cheat" the traditional system.

"We might remember Thomas Jefferson's view of a lottery," Virginia Lottery director Ken Thorson pled to the press. "It is an opportunity for the common man to spend a small sum for the possibility of a higher prize... We never anticipated a group trying to make such a large purchase."

Mandel was subjected to a 4-year legal crusade, in which he was personally investigated by 14 international agencies, including the CIA, FBI, IRS, National Crime Authority, and Australian Securities Commission.

In the end, neither Mandel nor the ILF was found guilty of any wrongdoing. "I will live to be 150," he proclaimed.  "I am not the type of person who lays down and dies because some glorified clerk doesn't know what he's doing."

Meanwhile, in his home country of Australia, he became something of a folk hero: A widely-circulated cartoon depicted him as a kangaroo hopping out of the US with a pouch full of cash — defiant, victorious, and full of life.

I want my money back

The future, however, was not bright for everyone. Four years after the Virginia win, Mandel's investors were still looking for their "phenomenal returns."

The investors — small business owners, machine operators, housekeepers, and doctors — had been regaled with tales of riches, and promised participation in up to 9 lottos per year. Yet, they'd only received a $1.4k return on their $4k investment.

Meanwhile, Mandel paid himself a one-time "consultant's fee" of $1.7 million, and purportedly sold the annuity on the 20-year payout to a US insurance company for a lump sum of $14 million. After overhead fees ($5.5 million for the tickets, and $500k in expenses), he was left with a princely sum.

Records show that he funneled this cash into the Pacific Basin Fund, a Hong Kong-based account managed by his brother-in-law. "What we calculated to be the reality has changed," he wrote in a 1994 letter to investors. "It may not seem such a hot investment now." After that, his investor updates went cold.

After failed attempts at launching a life insurance company and a lottery system in the British territory of Gibraltar, Mandel declared bankruptcy in 1995. He then spent the next decade running various investment scams — one of which earned him a 20-month prison sentence in Israel.

"Stefan Mandel is not only irrelevant," a disgruntled investor later quipped. "He's toxic"

And what became of the mastermind?

Today, Mandel spends his days at a beach house on a remote tropical island in Vanuatu, a country off the coast of Australia. He lives a quiet life and reports being "retired" from the lottery.

Anithalee Alex, his one-time associate, also dropped off the grid, and keeps a low-profile life somewhere in Illinois. "You could not have written a script as good as this," he reminisced, years later. "This is one time real life was better than fiction."

Though we were able to piece together the logistics of Mandel's 20-year lottery career, he's never revealed the minute details of his algorithm. As he told an enquiring AP reporter in 1992, "That would be like Coca-Cola revealing their recipe."

His legacy lives on in US legislation: All 44 states that run lotteries have enacted lawspreventing the profitable replication of Mandel's strategy. In effect, this secures him a title as the first and last man to ever successfully game the lottery by buying every possible combination.

Reflecting back on wilder times, he played off the riskiness of his gambit.

"I'm a man who takes risks, but in a calculated way," he told the Romanian paper, Bursa. "Trimming my beard is a lottery: There is always the possibility that I'll cut myself, get an infection in my blood, and die — but I do it anyway."

"The chances," he concluded, "are in my favor."

News story photo(Click to display full-size in gallery)

News story photo(Click to display full-size in gallery)

News story photo(Click to display full-size in gallery)

News story photo(Click to display full-size in gallery)

Hustle

We'd love to see your comments here!  Register for a FREE membership — it takes just a few moments — and you'll be able to post comments here and on any of our forums. If you're already a member, you can Log In to post a comment.

16 comments. Last comment 7 months ago by Stack47.
Page 1 of 2
Avatar
Simpsonville
United States
Member #163184
January 22, 2015
1748 Posts
Offline
Posted: August 27, 2018, 7:25 pm - IP Logged

Reading this and my only thought was the clerks who had to print the many tickets, how many times the rolls of paper had to be changed.  They got lucky since the article said all possible combinations were not purchased.   Might agree with the investors that he is toxic...to others but certainly not himself.  He got his money in a big way.

    music*'s avatar - Trek HAND1.gif
    Fresno, California
    United States
    Member #157851
    August 2, 2014
    3235 Posts
    Offline
    Posted: August 27, 2018, 7:28 pm - IP Logged

    Was it all worth it?  Mandel will be forever remembered as the man who changed the laws for every lottery player.

     He did come close to losing it all because of one retailer. 

    Party

      "May You Live Long and Prosper" Spock on Star Trek. A Vulcan.

      Avatar
      nassau
      Bahamas
      Member #118561
      November 3, 2011
      605 Posts
      Online
      Posted: August 27, 2018, 7:51 pm - IP Logged

      for real that was a scare

        Raven62's avatar - binary
        25
        New Jersey
        United States
        Member #17842
        June 28, 2005
        98275 Posts
        Offline
        Posted: August 27, 2018, 9:00 pm - IP Logged

        If it wasn't for Rolling Jackpots: Buying All the Combinations would never work Profitably!

        A mind once stretched by a new idea never returns to its original dimensions!

        Catch-22: A dilemma or difficult circumstance from which there is no escape because of mutually conflicting or dependent conditions.

        Corruptissima re publica plurimae leges: When the republic is at its most corrupt the laws are most numerous.

          itpmguru's avatar - 42a4d4d8f2a4312fb8e253dd8f6ef251
          No Man's Land
          United States
          Member #164133
          February 19, 2015
          6440 Posts
          Offline
          Posted: August 27, 2018, 10:21 pm - IP Logged

          It is like a night when you play your favorite P3 # 20x or 30x exact hoping for that big win, but realizing you forgot to play it with a $6 CBO to cover all possibilities and your investment.

          He was indeed a smart lottery player, but he was also a scammer taking the investors for a ride.

          Read up on the scam that is NCEL:   Not Live Drawings!


                                               


            duckman's avatar - ducklogodrake64x64
            Jacksonville Florida
            United States
            Member #23017
            October 6, 2005
            1046 Posts
            Offline
            Posted: August 27, 2018, 10:49 pm - IP Logged

            One thing that would also ruin the profitable payout for the "buy-all-combinations" player is if there are multiple jackpot winners...

              RJOh's avatar - chipmunk
              50
              mid-Ohio
              United States
              Member #9
              March 24, 2001
              20273 Posts
              Offline
              Posted: August 27, 2018, 11:00 pm - IP Logged

              One thing that would also ruin the profitable payout for the "buy-all-combinations" player is if there are multiple jackpot winners...

              The jackpot has to roll to an amount that would pay out enough to cover playing all the possible combinations and how often does that happens today with any lottery?

               * you don't need to buy every combination, just the winning ones * 

              Thumbs Up       

                Avatar
                Kentucky
                United States
                Member #32651
                February 14, 2006
                8189 Posts
                Offline
                Posted: August 28, 2018, 12:13 am - IP Logged

                Reading this and my only thought was the clerks who had to print the many tickets, how many times the rolls of paper had to be changed.  They got lucky since the article said all possible combinations were not purchased.   Might agree with the investors that he is toxic...to others but certainly not himself.  He got his money in a big way.

                The $27,036,142 jackpot (and $900k in secondary prizes) was to be paid out in 20 annual installments of $1.03 million.

                Correct me if I'm wrong but doesn't that average out to $408 a year for the 2,524 investors?

                  Avatar
                  100
                  ohio
                  United States
                  Member #5030
                  June 11, 2004
                  18538 Posts
                  Offline
                  Posted: August 28, 2018, 12:26 am - IP Logged

                  The jackpot has to roll to an amount that would pay out enough to cover playing all the possible combinations and how often does that happens today with any lottery?

                  now mega millions and power ball tickets is 2 bucks a ticket, Maybe thats why they went up on the price

                    TheMeatman2005's avatar - lightening
                    Brooklyn, NY
                    United States
                    Member #169719
                    October 29, 2015
                    1322 Posts
                    Offline
                    Posted: August 28, 2018, 12:58 am - IP Logged

                    now mega millions and power ball tickets is 2 bucks a ticket, Maybe thats why they went up on the price

                    If each store that printed 700,000 tickets at 6 cents per ticket they would benefit $42,000 for their trouble.

                    Not a bad day's work.

                    The Meatman 🥩🍗🍔🍖🍤🌭

                    “The quickest way to double your money is to fold it in half and put it in your back pocket.” Will Rogers

                    Winning happens in a flash, Like A Bolt Of Lightning!  Patriot

                      Todd's avatar - Cylon 2.gif
                      50
                      Chief Bottle Washer
                      New Jersey
                      United States
                      Member #1
                      May 31, 2000
                      24944 Posts
                      Online
                      Posted: August 28, 2018, 8:10 am - IP Logged

                      If each store that printed 700,000 tickets at 6 cents per ticket they would benefit $42,000 for their trouble.

                      Not a bad day's work.

                      That's a great point.

                       

                      Check the State Lottery Report Card
                      What grade did your lottery earn?

                       

                      Sign the Petition for True Lottery Drawings
                      Help eliminate computerized drawings!

                        Dd2160's avatar - Lottery-016.jpg
                        USA USA
                        United States
                        Member #134249
                        October 22, 2012
                        9416 Posts
                        Offline
                        Posted: August 28, 2018, 8:46 am - IP Logged

                        Just after 11 PM on February 15, 1992, a lottery ball machine at the Virginia State Lottery HQ spit out 6 winning numbers on live television: 8... 11... 13... 15... 19... 20.

                        In the coming days, officials would find out that one "person" had secured not only the $27,036,142 jackpot, but 6 second prizes, 132 third prizes, and 135 minor prizes collectively worth another $900k.

                        What unfolded next was the strangest, most improbable lottery tale in history — one involving thousands of international investors, dozens of complex computer systems, and a mathematical savant who'd masterminded the entire operation from the other side of the world.

                        This is the story of the man who "gamed" the lottery by buying every possible combination.

                        If you have not yet read Part 1 of this story, stop right now and head over to The man who won the lottery 14 times (part 1).

                        Part 2

                        As Mandel knew, the "buy all combinations" method of winning the lottery was more of a logistical than a financial challenge. The hard part was yet to come.

                        Tickets could be legally printed at home, but they still had to be taken to an authorized lotto retailer in the US, paid for (at $1 each), and processed. Waltzing into a gas station with 7m tickets and a truckload of cash wasn't an option.

                        Mandel hired the accounting firm Lowe Lippmann to transfer $7.1 million in investor funds to Crestar Bank in Virginia, where it was cut into $10k cashier's checks. He then lined up advance deals with Virginia-based retail chains to buy the tickets in bulk. All he needed was a point-person on the ground to orchestrate the mayhem.

                        For this task, Mandel turned to an esteemed associate by the name of Anithalee Alex.

                        Perennially outfitted in a gold rolex and a safari suit, Alex was a sweet talker who could "make the world seem like a bed of roses." An ex-paratrooper turned Rolls Royce salesman turned oil prospector, he could often be seen gallivanting around his small town of Teutopolis, Illinois, in a t-shirt that read: "Please Lord, let me prove to you that winning the lottery won't spoil me."

                        When his old pal, Mandel, rang, Alex was fresh out of bankruptcy court, with $400k in debt and 16 maxed-out credit cards. He was ready for action — any action.

                        The job was harrowing: He was to coordinate the drop-off, payment, and processing of 7 million lottery tickets at hundreds of stores all over Virginia.

                        The jackpot hit $27 million on a Wednesday; the next draw would be on Saturday. This meant that he and his team had just 72 hours to pull it off.

                        A logistical nightmare

                        On February 12, 1992 — 3 days before the draw — Alex checked into a Holiday Inn in Norfolk, Virginia and set up a "command center" at the Koger Center, a nearby business park.

                        In the "88-acre "maze of buildings," Alex assembled a team of 35 couriers (most of whom were certified accountants) and distributed cellophane-wrapped bundles of 10k tickets with stacks of $10k cashier's checks.

                        "Think of it like an office pool," he reportedly told the CPAs, "except a larger office pool."

                        For 2-straight days, the couriers methodically descended on 125 gas stations and supermarkets. At Farm Fresh, Miller Mart, and Tinee Giant locations throughout the region, flummoxed store clerks were asked to buy and process millions of algorithmically-generated lotto tickets.

                        "We thought they were nuts," Rick Miller, a local gas station proprietor, later admitted. "But if someone comes up and says they want to buy 700k lottery tickets, we're not going to chase them away."

                        A representative at Farm Fresh, who bought 2.4 million of Mandel's tickets, had a more spirited take: "For someone to try to do this ticket-by-ticket is a very chancy proposition," he said. "But that's what lotto's all about."

                        By Saturday evening, the team was nearing completion. Then, disaster struck.

                        One of the chains who'd bought tickets in bulk got overwhelmed and quit in the final hours, leaving millions of combinations on the table. When the deadline for entry arrived, only 5.5 million of Mandel's 7 million tickets (78%) had been processed. Mandel's "fool proof" plan, which relied on securing every single possibility, was in jeopardy.

                        Like a regular lottery, winning the jackpot would ultimately come down to luck.

                        "The most incredible thing in the world"

                        Mandel knew that without 100% of the combinations secured, his strategy was reduced to a multi-million dollar game of chance.

                        He was aware of other ill-fated attempts to game a US lottery by bulk-buying tickets: In a 1990, a Sacramento retiree bought 30k tickets with a diaper bag full of cash and walked away empty-handed; months later, a computer engineer known as "The Phantom" purchased 80k combinations at a Jacksonville, Florida bar and only won minor prizes.

                        Even if Mandel were to win, there was the possibility of multiple winners — a scenario that could significantly dilute the jackpot.

                        At 11:20 PM on February 15th, the numbers were drawn on live television. I nearby warehouse, Alex and his team frantically rifled through 5.5 million physical copies of receipts, looking for the winning ticket.

                        Then, piercing through the carnage, a victorious shout: They'd won.

                        "When the $27 million ticket came up, everybody was 6 feet off the ground," Alex later said. "It was the most incredible thing in the world." Purchased at a Farm Fresh in Chesapeake, the ticket had been processed in the twilight hours. Alex's diligence had paid off.

                        From his home in Australia, Mandel sent out a short message to his 2,524 investors: "One of our target lotteries did jackpot to our required level," he wrote. "We entered and won."

                        The $27,036,142 jackpot (and $900k in secondary prizes) was to be paid out in 20 annual installments of $1.03 million. But Virginia's lottery czars had other plans.

                        What would Thomas Jefferson say?

                        Although completely legal under both US and Virginia state law, the Australian group's feat was interpreted as an effort "cheat" the traditional system.

                        "We might remember Thomas Jefferson's view of a lottery," Virginia Lottery director Ken Thorson pled to the press. "It is an opportunity for the common man to spend a small sum for the possibility of a higher prize... We never anticipated a group trying to make such a large purchase."

                        Mandel was subjected to a 4-year legal crusade, in which he was personally investigated by 14 international agencies, including the CIA, FBI, IRS, National Crime Authority, and Australian Securities Commission.

                        In the end, neither Mandel nor the ILF was found guilty of any wrongdoing. "I will live to be 150," he proclaimed.  "I am not the type of person who lays down and dies because some glorified clerk doesn't know what he's doing."

                        Meanwhile, in his home country of Australia, he became something of a folk hero: A widely-circulated cartoon depicted him as a kangaroo hopping out of the US with a pouch full of cash — defiant, victorious, and full of life.

                        I want my money back

                        The future, however, was not bright for everyone. Four years after the Virginia win, Mandel's investors were still looking for their "phenomenal returns."

                        The investors — small business owners, machine operators, housekeepers, and doctors — had been regaled with tales of riches, and promised participation in up to 9 lottos per year. Yet, they'd only received a $1.4k return on their $4k investment.

                        Meanwhile, Mandel paid himself a one-time "consultant's fee" of $1.7 million, and purportedly sold the annuity on the 20-year payout to a US insurance company for a lump sum of $14 million. After overhead fees ($5.5 million for the tickets, and $500k in expenses), he was left with a princely sum.

                        Records show that he funneled this cash into the Pacific Basin Fund, a Hong Kong-based account managed by his brother-in-law. "What we calculated to be the reality has changed," he wrote in a 1994 letter to investors. "It may not seem such a hot investment now." After that, his investor updates went cold.

                        After failed attempts at launching a life insurance company and a lottery system in the British territory of Gibraltar, Mandel declared bankruptcy in 1995. He then spent the next decade running various investment scams — one of which earned him a 20-month prison sentence in Israel.

                        "Stefan Mandel is not only irrelevant," a disgruntled investor later quipped. "He's toxic"

                        And what became of the mastermind?

                        Today, Mandel spends his days at a beach house on a remote tropical island in Vanuatu, a country off the coast of Australia. He lives a quiet life and reports being "retired" from the lottery.

                        Anithalee Alex, his one-time associate, also dropped off the grid, and keeps a low-profile life somewhere in Illinois. "You could not have written a script as good as this," he reminisced, years later. "This is one time real life was better than fiction."

                        Though we were able to piece together the logistics of Mandel's 20-year lottery career, he's never revealed the minute details of his algorithm. As he told an enquiring AP reporter in 1992, "That would be like Coca-Cola revealing their recipe."

                        His legacy lives on in US legislation: All 44 states that run lotteries have enacted lawspreventing the profitable replication of Mandel's strategy. In effect, this secures him a title as the first and last man to ever successfully game the lottery by buying every possible combination.

                        Reflecting back on wilder times, he played off the riskiness of his gambit.

                        "I'm a man who takes risks, but in a calculated way," he told the Romanian paper, Bursa. "Trimming my beard is a lottery: There is always the possibility that I'll cut myself, get an infection in my blood, and die — but I do it anyway."

                        "The chances," he concluded, "are in my favor."

                        News story photo(Click to display full-size in gallery)

                        News story photo(Click to display full-size in gallery)

                        News story photo(Click to display full-size in gallery)

                        News story photo(Click to display full-size in gallery)

                        Wow he stiff his investors...terrible thing to do!!!

                        It was 4am when i read this so i could have been half sleep..lol.

                        SKANKIN SWEET!!

                        420 216 1420 0216 9998 3323 1991

                          itpmguru's avatar - 42a4d4d8f2a4312fb8e253dd8f6ef251
                          No Man's Land
                          United States
                          Member #164133
                          February 19, 2015
                          6440 Posts
                          Offline
                          Posted: August 28, 2018, 9:44 am - IP Logged

                          If each store that printed 700,000 tickets at 6 cents per ticket they would benefit $42,000 for their trouble.

                          Not a bad day's work.

                          I Agree!

                          Read up on the scam that is NCEL:   Not Live Drawings!


                                                               


                            GiveFive's avatar - Lottery-026.jpg
                            NY State
                            United States
                            Member #92605
                            June 10, 2010
                            4512 Posts
                            Offline
                            Posted: August 28, 2018, 10:14 am - IP Logged

                            "His legacy lives on in US legislation: All 44 states that run lotteries have enacted laws preventing the profitable replication of Mandel's strategy."

                            How's that done?  What do the laws say that keeps someone from buying every possible combo? 

                            I realize that's logistically impossible for a one person acting alone to pull off buying every combo, but I'm curious as to how the lawmakers crafted a law with language such that it prevents a coordinated effort.  G5

                            Players who've won large lottery jackpots have something in common. Many of them say "I've played the lottery for years, but I never won anything but small prizes."   That's normal or typical, but it's also why you should not get discouraged and stop playing.  Who knows?  Maybe someday you'll say "I've played the lottery for years...."