Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, February 19, 1992 TAG: 9202190227
SECTION: VIRGINIA PAGE: A-1 EDITION: METRO
SOURCE: TOM SHEAN and BONNIE V. WINSTON
DATELINE: LENGTH: Medium
AUSTRALIAN LOTTO LINK REVEALED
An Australian group that planned to buy all combinations of Virginia lottery numbers for Saturday's record jackpot wired $7.2 million to a Hampton Roads bank last week, a banker in the region confirmed Tuesday.The disclosure came as the Virginia State Police and the U.S. Secret Service on Tuesday said they are looking into multimillion-dollar block purchases of tickets that preceded the $27 million drawing.
The winner, yet to come forward, has 180 days to claim the cash and become Virginia's first Lotto millionaire. Annual after-tax payments will be $1,026,000 for 20 years.
Reports have been circulating for days that a foreign syndicate was behind the massive ticket buy-up, but the disclosure of a money transfer originating in Australia is the strongest evidence so far.
The banker, who asked that he and his institution not be identified, said the funds from Australia arrived at the bank last Tuesday via an electronic network used for quickly moving large sums from one U.S. bank to another.
The Australians told the bank they were going to buy all 7,059,052 possible combinations of lottery numbers with help from a computer program developed in their country. The Australians also said they had won 11 lotteries in this country last year, the banker said.
Lottery officials have reported that 96 percent of the combinations were purchased.
The Australian group, which had opened an account at the Hampton Roads bank, wanted the bank to write 700 cashier's checks, the source said. But the bank, uncomfortable about handling $7.2 million that arrived by wire, returned the money.
Turned down at one bank, the Australians apparently went to Crestar Bank, where they bought cashier's checks that were later used at some local retailers to buy up huge blocks of tickets.
Farm Fresh, the supermarket that sold the winning ticket, said Monday that it sold more than $2 million to one buyer, who paid with cashier's checks drawn from Crestar. The funds for the checks were deposited from an out-of-town account, said Farm Fresh Chairman Michael E. Julian.
A.C. Miller, president of Miller Oil, described a similar scenario. He estimated his company's Miller Mart stores sold $750,000 in tickets to one buyer.
Uni-Mart convenience stores, a Pennsylvania-based chain, also sold $1.5 million in tickets to one buyer last week.
The purchases at those stores raised the eyebrows of authorities.
State Lottery Director Kenneth Thorson said Tuesday that he notified state and federal investigators as early as last Wednesday after he learned that massive block purchases were being made.
"We contacted them out of concern - not that anything was wrong, but because we knew this was unusual," Thorson said.
Claire Capel, information officer for the state police, confirmed that the agency's Bureau of Criminal Investigation is "involved in an on-going investigation of the moving around of large sums in Hampton Roads."
An official of the Secret Service, which is an arm of the U.S. Treasury Department, also said the Richmond office was contacted late Tuesday morning by lottery officials.
"We are looking into the block purchase of tickets and the transfer of funds," said Ronald Shell, special agent in charge of the Secret Service's Richmond field office.
Janie Bowen, tax policy director for the state Tax Department, said the agency is looking at "possible tax implications if the winner is an out-of-state corporation."
"If it's a foreign national, then that's another issue altogether," Bowen said. "There are so many different tax-treaty issues that could come into play. It's difficult to do much until someone comes forward with the winning ticket."
In Richmond, at least one state lawmaker moved to slap stiffer rules on block purchases, which angered some small players.
Del. George Grayson, D-James City, said he plans to draft and introduce a bill that would force public disclosure of anyone purchasing more than $10,000 worth of tickets for any single game.
The measure would require ticket sellers and purchasers to report the name, address, Social Security number and employer of any individual or group that buys more than $10,000 worth of tickets for a single drawing. Violators would be barred from winning.
Grayson said he will present his plan to the State Lottery Board at its meeting in Richmond on Monday. At this point in the legislative session, he needs unanimous consent by the House of Delegates to introduce the bill.