Illegal gambling business took in $250,000
By Kate Northrop
A man from Ocean County, New Jersey pleaded guilty to operating an illegal lottery on Tuesday after having drawn in $250,000 in cash proceeds from the scheme.
Edward O'Neill, 54, of Beachwood appeared before U.S. District Judge Brian R. Martinotti via videoconference and pleaded guilty to charges against him, including one count of managing an illegal gambling business and one count of subscribing to a false tax return.
According to the District of New Jersey, O'Neill evaded more than $65,000 in federal taxes on his earnings.
Case documents and statements made in court detail the scheme that operated between 2014 and 2019, during which O'Neill managed an illegal lottery fashioned after the New Jersey Lottery's Pick 6 draw game.
"Players" participated by paying a $20 entry fee and selected six numbers from a pool of 1 to 49. Participants who matched their numbers to the numbers drawn in the New Jersey Lottery's official Pick 6 game would win a cash prize. O'Neill documented identifying information for each player along with their numbers into ledgers and monitored the Lottery's official Pick 6 results.
The ledgers O'Neill kept recorded up to 8,000 participants in one single drawing of his illegal lottery, with the cash prizes for each drawing often exceeding $100,000.
O'Neill gave himself a 10 percent cut of the winnings for each drawing in exchange for operating and managing the illegal lottery, a press release by the District of New Jersey said. After generating $250,000 in profits and failing to report his earnings on tax returns he filed with the IRS between 2014 and 2018, he skirted his federal income taxes by $65,674.
The maximum penalty for managing an illegal gambling business is five years in prison, while subscribing to a false tax return carries a maximum sentence of three years in prison. For both charges, O'Neill may also be subjected to a $250,000 fine or twice the gross gain or loss from the offenses, whichever is greater.
O'Neill's sentencing is set to take place on Aug. 25, 2021.