Lotto Rules Probe Key To Payoff In Virginia

Representatives of an Australian syndicate came to Virginia lottery headquarters to claim their $27 million jackpot, but lottery officials told them they might not be paid.

The International Lotto Fund, which includes more than 2,500 investors from Australia, confirmed that it held the winning ticket from the Feb. 15 Lotto drawing, ending a two-week mystery that has attracted national attention.

The fund also confirmed that it used another Australian firm to work out the logistics of buying the millions of lottery tickets and hired a Richmond accounting firm as a courier to purchase them.

Lottery officials say it is the first time a foriegn corporation has tried to corner an American lottery, and the first time any corporation has claimed a prize in Virginia.

The Lotto Fund reportedly spent about $5 million on lottery tickets. Its winning ticket would entitle it to $1 million a year for the next 20 years.

The Australians also claim to have a substantial number of smaller winners from the same lottery drawing-tickets with three to five correct numbers. Lottery  Director Kenneth Thorson said the payoff for those could exceed $500,000.

But before it pays anything, the lottery and the  attorney general`s office will investigate whether the syndicate broke lottery regulations, Thorson said. They will decide in a few days whether the Australians will be paid.

The investigation will be separate from other probes into the bulk sales launched by Virginia State Police, the FBI and Australian authorities.

Thorson suggested that if the ticket was declared invalid, the lottery could refund the Australians as little as $1, the cost of a ticket. No winning ticket in Virginia has ever been declared invalid.

Two representatives of the Australian firms, Joseph Franck and Robert Hans Roos, and two Richmond attorneys showed up at lottery headquarters Thursday to meet with lottery officials and representatives of the attorney general.

Stefan Mandel, a reputed numbers wiz who once cornered a $1.1 million Australian lottery and who Thorson said was affiliated with the syndicate, could not be reached for comment. An aide from Mandel`s Melbourne office, who would not give her name, said, ``The meeting went very well. We`re looking forward to payment.``

At a press conference, Thorson described the meeting as ``quite cordial.`` He said the men provided information about how they had tried to buy enough tickets to cover all 7.1 million possible six-number Lotto combinations. But it was still unclear, he said, whether the purchase of the winning ticket violated any lottery rules.

``The regulations have always been applied to the letter`` of the law, Thorson said. ``And the question here is what . . . does that letter require. ``It is just as likely that we will honor the claim as that we won`t,``

he said. ``The lottery is not reneging on anything. If the person has a valid ticket they get the prize.``

The lottery requires that tickets be bought at a licensed location. But the Australian firm, using cashiers` checks, paid for $2.4 million worth of lottery tickets at the Farm Fresh supermarket chain`s central headquarters in Norfolk, which Thorson said was not licensed to sell tickets.

The winning ticket was picked up at one of the chain`s Chesapeake stores, which was licensed to sell the ticket.

Thorson acknowledged the lottery was uncertain where the winning ticket itself was paid for and might never determine the location. The lottery knows some tickets were paid for at the headquarters. In other instances, tickets were purchased at the stores, he said.

One gambling law expert said Friday that the Australians were likely to receive the prize money, even if rules were broken when the group bought the ticket.

``If they`ve got a winning ticket, I`m assuming they`re going to get the money,`` said I. Nelson Rose, a professor at Whittier College School of Law in Los Angeles.

Rose said if the ticket holders purchased the ticket and followed what they thought were proper procedures, it would be difficult for the Virginia Lottery to invalidate the ticket.

Reference:

Virginia Lottery

Lotteries Virginia