Crime and Courts
Chief investigative reporter Jonathan Dienst on crime, corruption and terrorism.

I-Team: Retailers Scamming Customers, Cashing in on Lottery Tickets

How does someone win the lottery 16 times? How about 200 times? It's happening in the tri-state, but a review of records from all three states reveals that some of the biggest repeat lottery winners were not customers, but lottery retailers -- many who schemed to pocket winnings at the public's expense, authorities say.

Since 2012, 126 retailers in New York, 81 retailers in New Jersey and 163 retailers in Connecticut have been charged with lottery offenses, NBC 4 New York's I-Team has found.

On Long Island, deli owner Nabil Jaghab and his son Karim pleaded guilty to stealing a $1 million dollar ticket from a customer. Police said they lied to the lottery player by telling him his ticket was only worth $1,000, and they planned to pocket the rest. The Nassau County District Attorney's Office pressed for up to three years three years in jail for the duo, but a judge ultimately sentenced Nabil Jaghab to five years probation, while his son Karim received 90 days in jail.

At SDK Stationary in Morris County, New Jersey, lottery officials also accused the owner of tampering with scratch-off tickets. As a result, the owner was fined $7,500, although he has denied any wrongdoing to NBC 4 New York.

In Connecticut, investigators say they catch two or three stores every week trying to cheat the public.

“If they do something wrong, we’re going to enforce the law and come after them,” said Connecticut Department of Consumer Protection Commissioner Jonathan A. Harris.

Those enforcement efforts include actions taken against Weston Hardware & Houseware in Weston. Records show the owner was caught pre-checking tickets and selling the losing ones, according to Consumer Protection. The Weston store’s lottery license was suspended for six months.

“We monitor the system on a daily basis. We take a look at the marketplace, and we look around for irregularities,” Harris said.

In Connecticut, records show that the owner of a deli in Fairfield County won lottery games 215 times, collecting more than $107,000. In New York, one retailer cashed in 16 tickets purchased at their store, worth more than $600,000.

When contacted, the owners declined to comment on their many wins. They remain unnamed because they have not been charged with any wrongdoing.

Officials say that a pattern of winning alone is not enough of a reason to launch an investigation.

“They’re not precluded from playing the lottery, so that can happen, but again we have inspectors that are around the state, they know red flags when they come up,” Harris said.

Officials say that common retail scams include lying to customers about their winnings, and a technique called pinning, where retailers pre-check scratches with the swipe of a pin and sell off the losers.

Richard Lustig of Florida became a millionaire off multiple lottery wins and wrote a book on hitting the jackpot.

After being shown stats about how some retailers are winning over and over again by cashing in on tickets from their stores, Lustig said, “It’s gotten out of hand, it’s ridiculous.”

Lottery officials in New York declined to comment on camera, however in a statement, told NBC 4 New York they "investigate all claims for prizes to ensure that the claimants are the rightful owners of tickets: technology has advanced so much so that lottery players do not have to just trust the retailer anymore."

New Jersey lottery officials also declined to be interviewed, saying in a statement that it "upholds the integrity of the Lottery and enforces safeguards in place at all levels of play at more than 7,500 Lottery retailers across the state."

It added that it promptly investigates all customers complaints of retailer fraud, and has a team of security investigators to ensure that retailers are in compliance. 

Harris, the Connecticut lottery official, said, “We want things to be fair. If people are going to be putting their money down then they deserve a fair product." 

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