A longtime sales supervisor for the Massachusetts State Lottery was fired Tuesday after he was seen cashing winning instant tickets, a state official said, sparking fear that the lottery's supposedly strict security protocols may have been violated.
David Cannistraro, a $100,000-a-year employee who had worked for the lottery since 2002, was first placed on paid administrative leave in June after another lottery employee saw him cashing tickets at a store on Cape Cod, said Chandra Allard, chief of staff at the state treasury.
Lottery officials believe he was not just playing the lottery — which is prohibited by state law for lottery employees and their immediate families — but may also have been helping himself to tickets that were returned to the New Bedford district office but were still active and could be cashed.
"We are taking this matter very seriously as the integrity of our operations is of the utmost importance," said lottery executive director Michael Sweeney in a statement. "The lottery is not only performing our own internal investigation, but has also referred this matter to the MA State Police."
In a notification to State Auditor Suzanne Bump sent on Aug. 5, lottery officials estimated that $10,000 to $15,000 in tickets were stolen, but added that the matter is still under investigation. If that number is accurate, it suggests numerous winning tickets were cashed because only prizes of less than $600 can be collected at a store. Larger prizes require the winner to go to a lottery office.
The lottery tightly controls how unsold tickets are returned and stored because until they are destroyed the tickets are active and prizes can be claimed.
When a lottery agent is terminated or a game discontinued, tickets come back in locked bags and are placed in a locked room where two employees of different departments are supposed to verify in writing that the contents match what was taken from the retail store. They are then placed in locked bins to be shredded and destroyed.
Cannistraro appears to have gained access to returned tickets, Allard said.
State Trooper Steven McKay, who is assigned to the state treasury, is investigating how the returned tickets were accessed, how often, and by whom. He is also looking at other district offices to see whether they may have security gaps, Allard said.
In his statement, director Sweeney promised to hire "an independent, outside firm to conduct an audit to ensure that proper safeguards are put in place" once McKay's investigation is finished.
Victor Matheson, a professor at the College of the Holy Cross and an expert on gambling, said the lottery should take the alleged theft seriously.
"Keeping an honest image is really an important piece of any lottery's job," Matheson said. "This is exactly the sort of thing that is very harmful to the reputation of the agency and the sort of thing that causes players to not want to participate."
He expressed surprise that a lottery employee was apparently able to gain access to unused tickets and cash them in over time without being detected.
"It's not surprising that someone tries this. It's a problem in any gambling operation," Matheson said. "It's surprising that they could get away with it and not get caught quickly."
Officials said the lottery recently put in a place a new computer system that will prevent theft by deactivating unused tickets at retail stores — before they are returned to the lottery.
The new system was put in place a few months before Cannistraro was seen cashing tickets.
State Treasurer Deborah Goldberg, who oversees the lottery, found out about the incident in early August and praised the employee who reported seeing Cannistraro cashing in tickets.
"The lottery is taking the appropriate steps to get to the bottom of this and I am proud that a lottery employee stepped forward to make us aware of potential wrongdoing," she said in a written statement.
Cannistraro could not be reached for comment, nor could the employee who brought the incident to the attention of his bosses. Tom McKeever, an official of SEIU local 888 which represents lottery employees, declined to comment, citing the ongoing investigation. A lawyer for the union did not return phone calls.
This is not the first time the lottery has faced questions about the security of returned tickets.
In 2014, State Auditor Bump found that two employees did not always sign off on the ticket returns, as required, to insure the lottery had "properly accounted for, and safeguarded" tickets that had been returned from retailers who were no longer lottery agents.
Lottery officials said at the time they had put in place a system that would make sure that returned tickets were secured and destroyed.
Bump said she was troubled to learn that security weaknesses uncovered by her 2014 audit may not have been corrected.
"If these allegations are substantiated," she said, "it is indeed troubling that a supervisor engaged in these activities and that safeguards we recommended in prior audits apparently have not been fully implemented. "
State audits are generally conducted every three years, but Bump's office has not done an additional audit since 2014.
Bump said her office was planning a new audit and said "the results will be made public when that process is complete."