Posted on 01/27/2012 5:17:13 AM PST by jjotto
Lottery Calls Series Of Events 'Strangest Situation' In 26-Year History
DES MOINES, Iowa -- A New York lawyer, acting as the trustee for what is called the Hexham Investment Trust, has indicated he will not pursue a claim for a $14 million lottery jackpot.
Just after 6 p.m. Thursday, lawyers in Des Moines representing attorney Crawford Shaw said he is withdrawing his claim for the "Hot Lotto" ticket that was submitted to Iowa Lottery officials just hours before a Dec. 29, 2011 deadline. The ticket had been purchased at a Des Moines convenience store a year earlier.
Lottery officials said there were conditions that had to be met before they would release the winning the jackpot, including the identity of the purchaser and whether the ticket was legally purchased, presented and possessed.
The statement by the Davis Brown law firm said, "The purchaser has chosen to remain anonymous. The identity of the purchaser has not been disclosed to Shaw."
Shaw told a reporter for the Reuters news service he was giving up the claim because "I'm not going to argue with the lottery."
The statement from the Des Moines lawyers concluded Shaw "has agreed to take no further action." But Lottery officials say the Iowa Attorney General and the Iowa Division of Criminal Investigation (DCI) will continue to investigate the situation to see if any laws were broken.
A lottery statement Thursday night called the series of events "the strangest situation that we can recall in the 26-year history of our lottery."
"We couldn't verify the winner. That's the bottom line. We could verify the winner and they could claim it," said Iowa Lottery CEO Terry Rich. "If, in fact, Mr. Shaw, as a trustee, could provide the information, we were ready to write the check tomorrow at 3 p.m."
Lottery officials said the $10.7 million will be returned to the multistate lottery commission, and Iowa will get roughly $1.3 million back.
Interesting. I wonder what they will say if they found the Iowa Lottery is the one that broke the law.
Every lottery that I have seen has a statement on the back of the ticket to the effect that: this is a bearer instrument until signed. That means that as long as the ticket is valid, the holder is entitled to the proceeds.
Perhaps the law authorizing the Iowa Lottery is different. But if it isn't, they just destroyed their own integrity. If the Iowa Lottery can refuse to pay this claim, then they can refuse to pay any claim. Iowans should seriously reconsider playing that lottery, and instead make a trip into a neighboring state.
I’m wondering if there isn’t more to this story than we know. For example, is the lottery winner wanted by the police for a serious crime? (Is that why he or she would rather remain anonymous than claim millions?) Is the ticket a fake? I just get the impression there is a lot more to this story than we know.
mmm...
Even a state that allows a winner to be ‘anonymous’ only allows the winner to be anonymous to the public, not to the lottery itself.
The shady lawyer involved won’t even explain how the person in the video who bought the ticket transferred possession. Stolen or forged tickets needn’t be honored.
Seems like lawyer just should have said it was his and paid the taxes.
...Crawford Shaw, who is trying to claim a jackpot worth much as $14.2 million on behalf of his client, Hexam Investments Trust, is being sued over his involvement in a now-bankrupt company called Industrial Enterprises of America Inc...
...Iowa law requires a winner to give his name and address when claiming a prize. The winner does not have to make a public appearance or a public statement, though most have done so...
Thanks for the link, jjotto! Lots more to this story than the initial reading!
That's not correct. Every state (except Iowa, it appears) honors the ownership of a ticket by a legal entity, such as a trust. Actually, even Iowa is supposed to, according to their rules:
https://www.legis.iowa.gov/DOCS/ACO/IAC/LINC/10-19-2011.Chapter.531.11.pdf
The shady lawyer involved won’t even explain how the person in the video who bought the ticket transferred possession. Stolen or forged tickets needn’t be honored.
It doesn't say so in this article, but an earlier article says that the ticket has been validated by the lottery. So, it's not forged. And the 30 or so claims that the ticket had been stolen from them had been investigated, and found without merit.
Seems like lawyer just should have said it was his and paid the taxes.
He can't. He represents the trust. And if the beneficiary of the trust doesn't want to be identified, the attorney can't do so -- or he can be disbarred.
I'm sure there is a lot more to the story. The actual winner probably wants to conceal his newfound gain from someone in his past.
It could be a messy divorce, or a bad business deal. He could even be in the witness protection program.
But, the ticket isn't a fake. The lottery has already validated it.
You should make a deal with Crawford Shaw!
I think this is someone's misinterpretation, if they are trying to imply an individual must identify himself. The Iowa lottery's doesn't say that:
https://www.legis.iowa.gov/DOCS/ACO/IAC/LINC/10-19-2011.Chapter.531.11.pdf
Maybe I missed something, but it specifically says that a legal entity (such as a trust) can claim the prize. This is what is typically used in other states that require that the winner be identified.
Another possibility: In some cases, major lottery prizes go unclaimed because the winner is in the country illegally -- no one really checks much on the middle-tier prizes, which is what they're playing for, but a jackpot is going to invite... unwelcome scrutiny.
Same basic idea, though -- the winner wants the money, but has a strong reason to not let anyone know about it.
Perhaps there is a misunderstanding of
531—11.1(99G) Claiming prizes. 11.1(1)...
and of
531—11.3(99G) Invalid tickets not entitled to prize payment. If a ticket presented to the lottery is invalid pursuant to the terms of these rules or the specific game rules, the ticket is not entitled to prize payment...
>>>Every lottery that I have seen has a statement on the back of the ticket to the effect that: this is a bearer instrument until signed. That means that as long as the ticket is valid, the holder is entitled to the proceeds.
True - but subject to validation of ownership of the ticket... got to know who they’re taxing when they withhold taxes from the winnings.
There is no integrity problem with the Iowa lottery...this is strong evidence to the contrary. The out-of state lawyer involved has a less then stellar reputation, which proceeded him.
Actually, I would have hired another attorney, and filed suit against the Iowa Lottery.
The Iowa Lottery is apparently trying to use 531—11.11(99G) to avoid paying the ticket:
Stolen or lost tickets. The lottery has no responsibility for paying prizes attributable to stolen or lost tickets.
This is an abuse of a provision that is intended to indemnify the lottery against claims from people that say they lost a ticket or it was stolen from them, and can't produce it for validation.
The ticket isn't lost. And if the lottery thinks the ticket is stolen, it's their responsibility to prove it. They claim to want to know the chain of custody, but their own rules say that the ticket is a bearer instrument until signed. So, the chain of custody is none of their business.
The trust owns the ticket. The EIN of the trust is used for withholding purposes. The lottery's own rules provide for this.
https://www.legis.iowa.gov/DOCS/ACO/IAC/LINC/10-19-2011.Chapter.531.11.pdf
See 11.1(1).
A tax return is filed for the trust, and passes the tax liability to the beneficiaries. The IRS (both federal and state) will get the income taxes. If they decide to connect the dots, those agencies can then figure out who actually won. But, they are bound by law to keep it confidential.
There is no integrity problem with the Iowa lottery...this is strong evidence to the contrary. The out-of state lawyer involved has a less then stellar reputation, which proceeded him.
The lawyer may have a less than stellar reputation, but he presented a valid ticket. What part of the Iowa Lottery Code requires that winners be of good character?
Okay, let’s say that the holder of the ticket has a really good reason to forfeit millions of dollars. Can he or she make a contract with another person to split the proceeds and give the ticket to a second person to claim as their own? For example, Mike has the ticket but gives the ticket to John. John has already signed a contract stating he will split the money to a percentage agreed upon by both. Can’t “John” claim the ticket? If so, “Mike” can go nameless with the lottery board.
The lottery is not contending that the ticket is invalid.
In a previous article, they specifically said that the ticket had been validated:
Blow.
The so called “trust” is dropped the claim. The lottery has followed their rules and state law. There is ZERO claim to the contrary, other than YOU. There is no problem here. Other than you.
This is what I find really interesting about this: that someone would give up so easily. Even if it was a messy divorce, the worst that could happen is he has to split it.
I'm wondering if the real winner has a compelling reason to remain anonymous, as in a price on his head.
Can he or she make a contract with another person to split the proceeds and give the ticket to a second person to claim as their own?
Some lotteries prohibit resale of a ticket. But, there's nothing that prevents you from sharing a ticket. The IRS might get involved and demand proof of "co-ownership", or they will assess a gift tax.
Typically, co-owners of a ticket create a revocable trust to claim the ticket, and then use that legal entity to redistribute the proceeds. Since the ticket is a bearer instrument, I don't believe there is anything that prevents that.
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