Gloria C. Mackenzie became the largest sole lottery winner in U.S. history in mid-2013 when the then 84-year-old took home about $278 million after taxes on a $590 million Powerball ticket she bought at a Zephyrhills Publix supermarket.
Five years later she sued her son Scott Mackenzie, who was her caretaker and the one who had "total control" over millions of dollars in winnings, saying he and his investment manager each lived off the money while poorly investing the proceeds, according to her lawsuit filed by attorney Gregory Anderson.
The 40-page lawsuit, which was revisited in court this week in Jacksonville, demands a judge and jury identify and preserve Gloria Mackenzie's Powerball winnings, saying she suffered damages in excess of $10 million due to negligence, conspiracy to misrepresent and breach of fiduciary duty. It also says her son and his actions were not done in good faith, breaching his legal duties as power of attorney as well as receiving unjust enrichment and exploiting a vulnerable adult.
This deprived his mother of gains she should have earned that would have generated "tens of millions of dollars" after he hired a Jacksonville investment adviser who Anderson said wasn't qualified to handle the account. While those investments "just sat there earning nothing," Anderson said the investor overcharged for his services while the son never checked on any of it.
"You don't have to know anything more than a branch manager at a bank to come back with some significant returns," he said. "At the same time, he [the investment manager] was charging my lady, age 90 and in ill health, $2 million in fees."
It's not clear how much of her winnings she has left.
The initial lawsuit was dismissed Feb. 14, and an amended version was filed March 6. Tuesday in Jacksonville, Judge Virginia Norton heard a 20-page motion to dismiss the amended lawsuit, filed by attorneys Lee Wedekind III and Dell Chappell, representing Scott Mackenzie.
It has not been ruled on yet. But the motion says the lawsuit is solely based on allegations that Scott Mackenzie introduced his mother to an investment adviser who put her in "conservative investment vehicles, in accordance with her chosen investment objectives, and effectively preserved her wealth."
"That Gloria's accounts did not increase in value as much as plaintiffs, in hindsight, would like is not a proper basis for a lawsuit," the motion says. "... Rather than pleading ultimate facts to support their claims, plaintiffs continue to pursue legal theories that are unsupported by the facts they allege."
Wedekind released a statement adding that his client is "deeply disappointed" with his family members' decisions and their motivations in bringing this lawsuit but is equally confident that the truth will prevail.
"Although he strongly disagrees with the allegations that have been made, he will respect his family's privacy by reserving any further comments until the case has been concluded," Wedekind said.
Gloria Mackenzie married Ralph L. Mackenzie in 1951, then they moved to a Zephyrhills trailer park until his 2005 death, living on Social Security, the lawsuit said. On May 18, 2013, things changed when she bought the winning Florida Powerball ticket.
She bought a 6,300-square-foot, five-bedroom home in Glen Kernan Country Club, currently assessed at $1.13 million, according to Duval County property records. The Tampa Bay Times reported the deed to the home was transferred to her daughter and trustee Melinda MacKenzie in June 2013. But Duval County records now show the home listed in her son's name.
Anderson said the mother could have "hired and afforded nannies, nurses and housekeepers," but she wanted family to take care of her. Scott Mackenzie convinced his mother that he had given her half of the $10 she used to buy the ticket and therefore was entitled to half the winnings, the attorney added.
"It is confusing whether he gave her $5 or worked around the house for the $5, or just happened to have it and handed it to her and she handed it to the Lotto ticket dealer," Anderson said. "... Gloria is fairly sharp, but she is 90. She was really concerned about being taken care of and this was an activating factor for her to help her son, because she wanted someone to take care of her."
The mother did give some funds to her other children, Anderson said. But the lawsuit said the son placed half of her winnings in various trusts and entities designed to "foster tax savings and advance Gloria's philanthropic aims," then Anderson said he convinced her that she should "give him half of it." Since he also had power of attorney, which gave him "the authority to conduct investment transactions" on behalf of his mother, he began looking for an investment company.
Scott Mackenzie, an assistant manager at a shoe store at the time, didn't choose a major investment firm. For reasons that "escape virtually everyone who examined this," Anderson said he chose Hank Madden of Madden Advisory Services, who hosts a local call-in Saturday morning financial advice show on the radio.
The lawsuit says Madden had never handled any account the size of the Mackenzie's. It also says some of Madden's prior clients had complained about him, and he had been fired for "commingling funds by an investment firm that employed him."
"Scott failed to perform the proper due diligence to investigate and understand the person being considered to handle his mother's nine-figure portfolio," according to the lawsuit. "... Having had little money to her name and being a widow well into her 80s, Gloria had no knowledge or experience with which to judge the veracity of the representation or the performance of her son Scott or Madden."
Anderson said Scott Mackenzie transferred millions into Madden's control, a man who "failed to invest the funds in an appropriate mix of investments" and did very little trading. Yet Madden also was charging "outrageous amounts and fees totally untied to any actual performance," Anderson said.
"Scott did not protect his mother, failed to properly discharge his duty to her and instead eventually banished her from the house they shared together because she was no longer able to care for herself," the lawsuit says.
That occurred after Gloria Mackenzie fell and hurt herself, yet wasn't moved to a nursing home, Anderson said.
"She... ends up living with another of her children outside of Jacksonville," Anderson said. "The sad thing is Gloria could buy every assisted-living facility in Jacksonville."
In the end, it took Gloria Mackenzie years to understand that her son and Madden had "poorly served her," the lawsuit says.
If the amended lawsuit is not dismissed, it could be heard before a jury this fall or early 2020, Anderson said.
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I am speechless. Shocked but not surprised.
Be willing to spend money on the professionals that you will need. Doctors, Nurses, Psychiatrists, Certified Financial Planners, CPAs, Lawyers, and Attorneys, Insurance agents, and other Financial advisers that you might need.
Gloria was penny wise but pound foolish.
I hope that she is successful in the Court of Law.
There are other similar cases here on Lottery Post. Children taking advantage of their parent's good fortune. In Texas maybe.
While not caretaker per se, this almost hits me right at home...........
And by the way--
WHY ARE ALL LOTTERY WINS TRAGIC?
This is a very sad, sad story! And with Gloria being 90 years old she may not live long enough for it to be resolved. She should be living on "easy street" not having to deal with lawsuits. I would pull the Power of Attorney away from the son immediately.
Any investor who does not have five years to ride through a downturn in the economy should not invest.
I found the TX story of how children are stealing from their parents. It is, Texas lottery winner battling Alzheimer's as daughter stole $250,000.00 lotterypost.com/news/320759 6/13/2018
I just read in a reply by an LP Member that Arizona is a Senior Citizen friendly State. They have very strong lobbyists.
Gloria should have “ known “ her son, obviously she didn’t. Having your arm held on tv after a massive jackpot win, is not always an indication that your wellbeing is truly their children’s concern. At 90 years of age, this is no time to go into battle formation.The Egyptian Pharaohs thought that they could take their wealth into the afterlife, didn’t happen. Make the most of the time you have left Gloria, the stress & added mental burden could come at a cost. It’s not worth it.
Good point. Very easy to tear up a poa if she made it revocable. If the financial expert lost the money, she may be out of luck unless she can shoe negligence or fraud. It is never too late to try to right a wrong.
Scott Mackenzie introduced his mother to an investment adviser who put her in "conservative investment vehicles, in accordance with her chosen investment objectives, and effectively preserved her wealth."
It looks like the type of investment anyone Gloria's age should make. In retrospect had she invested $18 million in the Dow Jones stocks, it would be worth over $26 million today not including dividends. The same $18 million invested in "wrestling stock" (WWE) would be worth $180 million today. If an any investment does poorly, is a financial adviser liable and/or shoe negligence for not recommending stocks that eventually increased 1000% in the last 6 years?
The problem is once a person invests in "conservative investment vehicles" and years later look at what they "could have" made, it's no different than Mindy saying "had I stopped her from cutting in line, how to invest millions would be my problem". Because we don't know all the details, can't really comment on who is right, but it's still terrible any time a parent has to sue their children or vice versa.
WHY ARE ALL LOTTERY WINS TRAGIC?
Because they're not. There are plenty of stories in L.P about people doing good things with their winnings, but the first unofficial rule of journalism is "If it bleeds, it leads."
If an editor has room for one more short story on the front page (or a producer of a TV newscast) then which story do you think they'll print/air? The one about the cop getting bitten in the groin by a dog or one about another cop rescuing an autistic girl's kitty from a tree? The stories they run are a reflection upon our society, IMO. We'd rather see/hear about some Hollywood celeb getting arrested for drugs than about another that went over to the ME to entertain the troops.
If you've ever watched The Lottery Changed My Life, then you'll see that the "feel good" stories outnumber the tragic ones. My favorite one is about James Gatzke, a simple man who won a lottery with the last couple of bucks to his name, took the annuity and last I heard, was living in a motel...because that's what he wanted to do. We hardly ever see any stories about him and none about how he's doing today, but in the thousands and thousands of "tragic" lottery winner compilations, they always mention David Lee Edwards, an ex-con who spent money hand over fist, got addicted to drugs and died penniless.
Today's journalism is almost "1984-ish" - "Bad news: good; good news: bad"
Unfathomable that you'd do this to your own Mother; this is so sad and shocking.
Not mentioned, but wonder if Scott's boyfriend had his hand in this too? Doesn't matter, a s----y son is what he is and he'll get his.
Here we go again. Lottery winner drama. With all that money just open 4 accounts in different banks and enjoy the interest. Investing is great but have to be done right and honestly. A mother Sue's a son is alarming but I need to hear all sides of this story. Hope she lives to see the outcome of the case.
It's so sad that You can't Trust Your own Family. It's hard to believe that Greed takes over.
I wish her the Best.
The initial lawsuit was dismissed Feb. 14, and an amended version was filed March 6. Tuesday in Jacksonville, Judge Virginia Norton heard a 20-page motion to dismiss the amended lawsuit, filed by attorneys Lee Wedekind III and Dell Chappell, representing Scott Mackenzie.
Did you miss where the Judge hasn't decided whether this amended lawsuit should be dismissed too?
It has not been ruled on yet. But the motion says the lawsuit is solely based on allegations that Scott Mackenzie introduced his mother to an investment adviser who put her in "conservative investment vehicles, in accordance with her chosen investment objectives, and effectively preserved her wealth."
Other than someone convinced Gloria that because her investments aren't doing as well as Scott's there must be something wrong, there is not enough information to form an opinion on whatever happened.
By the way, what exactly did Scott do his mother that is "sad and shocking"?
"the then 84-year-old took home about $278 million after taxes"
And then she paid the rest of her taxes the following April. Her actual after-tax net was likely around $225 million.
"saying she suffered damages in excess of $10 million due to negligence, conspiracy to misrepresent and breach of fiduciary duty."
Oh, the horror. Too bad if it's true, but not quite as bad is it sounds from the headline about her winnings being squandered.
"what exactly did Scott do his mother that is "sad and shocking"?"
Good question. This story has plenty of allegations from an attorney who stands to collect a fat fee himself if he's successful, but not much in the way of things that we know to be true. With as much money as she had she could have handled the risk of investing in things that weren't conservative, but she could also have put the money in a safety deposit box and never come close to spending it all.
Maybe somewhere down the road we'll have a reasonable idea of what happened and who's side is closer to the truth, but right now this is a lot like the Canadian guys claiming they owned shares of their coworker's winning ticket. Nobody here has seen any proof, but but most people are sure they know who did somebody wrong.
l reread this story and got to ask myself, is it just me, or is Gloria's attorney insinuating that Mackenzie weaseled his way into the jackpot sharing deal, that he never won, to begin with? Sure sounds as though her other children are putting her up to this, this going after the son. The other thing is, Gloria, can afford extraordinary care at a first Class care home, free from the influences of these children, why doesn't she get away, what's holding her back? This story is making Gloria out to be one of those rich folk who eats food out of cans while having millions of dollars in mattress money stored away.