$15 million lottery windfall creates problems where it would otherwise solve them

By Kate Northrop

A bankrupt builder turned lottery winner is accused of intentionally failing to disclose a $15 million (US$10.14 million) Australian lottery windfall from creditors and faces trial and a possible prison sentence.

Former builder Terry Woodall won $15 million playing X Lotto in the Australian Lottery, but rather than make his life easier, the prize has created a situation that landed him in court.

In February 2013, around the same time when a separate judgment found that he had performed defective work in his hometown, Woodall declared bankruptcy with $450,000 (US$304,472) in debts and was told to pay $337,000 (US$228,016) to his creditors.

Although records indicate that his profession is listed a builder's laborer, Australian online journal The Advertiser found through a corporation search that Woodall was appointed as the director of a company called Oz Terry in December 2018.

He offered up $100,000 (US$67,661) to clear the entire debt after winning $15 million in the lottery, which his creditors rejected.

Instead, creditors told Woodall that they would clear the debt and dismiss the bankruptcy charge for $1,000,050 (US$676,639). Woodall agreed and paid the amount.

However, the Australian Financial Security Authority (AFSA) launched an investigation against the ex-builder for hiding his lottery windfall from his creditors in the first place, between June and August 2018. In a hearing in November 2021, his defense attorney, Craig Caldicott, claimed that Woodall was not aware of an obligation to disclose a lottery win.

"Ignorance of the law is not a defense, but he didn't have any fraudulent intention," Caldicott had said.

In fact, the prosecutors said, he was told that he had to disclose any property, which includes any lottery wins, and that he was deliberately hiding the win because he had only offered $100,000 to initially clear his debt.

While Woodall was originally charged with concealing property with intent to defraud creditors, he pleaded guilty to a lesser charge of being bankrupt who concealed property to the value of $20 or more. Both his defense and the prosecution had accepted the agreement.

Considering that and how Woodall had repaid all his debts and associated interest, defense counsel Lindy Powell KC contended, the case should have easily been wrapped up. "An argument at the bar table" caused a magistrate to reject the deal.

Prosecutors then withdrew the lesser charge and reinstated the original offense, which carries a maximum five-year prison sentence, Powell said.

"It was not that my client withdrew his plea, he had his plea cut out from under him," Powell explained.

Now, Woodall is asking the Adelaide Magistrates Court to order prosecutors to reimburse his legal bills for the past five years.

Prosecutors denied the possibility of solving the case by reverting to the lesser charge, saying that the plea deal was serving "a utilitarian purpose" under COVID-19 restrictions and resulting court delays but no longer meets "prosecutorial policy."

"My client was in bankruptcy for a number of years, he won $15 million, he was required to disclose that to his trustees and did not — none of that is in dispute," Powell explained. "The issue that is now going to trial is whether he intentionally defrauded his creditors, or whether he was ignorant of his obligation to disclose the win. Now the entire case has been reanimated except for the lesser charge to which he pleaded guilty, that's all gone, and that's why we now want our court costs."

Woodall's case awaits a decision by Magistrate John Wells.