Lottery Loser

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Last time I checked, winning the lottery counted as a source of income. For example, if someone had to pay a bill, and miraculously won the lottery, they could use some of their winnings to pay their bill. Seems simple enough, right? Perhaps not – according to today’s Fraud of the Day from CBS Boston.

The article reports that a Massachusetts native who has won more than $300,000 from the state’s lottery over the last four years (he is just super lucky) defrauded ”taxpayers by applying for and accepting state medical welfare benefits worth more than $16,000.” Apparently, the man is suspected of being what’s called a ”10 percenter,” someone who cashes winning tickets for others and keeps 10 percent. According to the article, ”investigators will tell you there are a number of people out there who don’t want to pay back child support and/or back taxes.” (All this can be difficult to visualize, so here’s a simplified equation: big lottery state + allegedly illegally collecting benefits [Massachusetts has some of the highest benefits in the country] + not paying child support or back taxes = who needs a job?)

The defendant appeared in court without a lawyer and told the judge: ”I thought this was some kind of mistake.” (Translation: You don’t understand—I didn’t win the money. Other people who are scamming the system won the money. I just collect the winnings and keep 10 percent, so they can stay on welfare or avoid child support payments.)

Ignorance of the law is no excuse; and intentional fraud can be prevented. As in many cases where taxpayer dollars are concerned, it comes down to data. When agencies have better access to information on program recipients, they are able to form a more holistic picture of the recipient and his or her assets in order to decide whether the individual is eligible for the benefit program. If, for example, an individual applies for welfare benefits and data indicates that he or she has received a significant amount of lottery winnings over the last few years, then a red flag is raised to investigate the matter more fully, before sending the check. Sounds simple to me. What do you think?

Source: Today’s ”Fraud of the Day” is based on the article ”Massachusetts Lottery Winners Accused of Welfare Fraud,” published by CBS Boston on May 31, 2012.

BOSTON (CBS) – Public benefits like housing, healthcare and food stamps are supposed to be for people who really need them, not people making hundreds of thousands of dollars. But over the past year, investigators from the State Auditors’ office have found just that. Investigators say at least two big time lottery winners are bilking the state out of thousands in public benefits.

Frank Basile of Waltham should be smiling. He has won more than $300,000 from the state lottery in four years. Now he is charged with defrauding taxpayers by applying for and accepting state medical welfare benefits worth more than $16,000.

 

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.