Part 6 of a 10 Part Editorial ...
(Opinions by Dawn Nettles, Publisher, The Lotto Report)

- Busted Again -
Uncashed Prize Checks - The Players Money
TX Lottery Knowingly & Intentionally Kept One
(RE: Texas Lottery - Internal Audit - 2012 - Prize Payment Account Review)



Texas Lottery
Where Is The Missing Money?
Was this the PERFECT Crime?
Was it embezzlement? Fraud? Theft?
Or sheer incompetence?

-------------------------

brought to you by
The Lotto Report

Series Began: August 1, 2013
Part 1: Posted August 1, 2013
Part 2: Posted August 4, 2013
Part 3: Posted August 7, 2013
Part 4: Posted Aug 13, 2013
Part 5: Posted Aug 20, 2013
Part 6: Posted Oct 22, 2013 - Below
Part 7: Posted March 13, 2014
Part 8: Posted April 6, 2014
Part 9: Posted ??, 2014
Part 10: Posted ??, 2014


 

An introduction to the main characters of this
editorial was shown in Part 2. If you've forgotten,
click here for a refresher to see who's who.

 

Texas Lottery Commissioners
Chair J Winston Krause (Appointed March 2009)
Jodie Baggett (Appointed Sept 2013)
Katie Stavinoha (Appointed Sept 2013)
John W Townes (Appointed Dec 2013)
Mary Ann Williamson (Resigned 8/16/13 - Re-appointed 3/11/14)

Commissioner Veronica Edwards (Resigned 2/13/14 - Effective 3/31/14)


- Part 6 -

Reviewing Cold Hard Facts

The State Auditor, who received a Complaint
against the Texas Lottery in Nov 2010, decided
to let the Texas Lottery investigate itself.
This was their way of handling the Complaint.

In my series, I've been covering the findings
contained in the final 2012 Audit Report
with regards to the allegations.

In Part 6, we're going to look at the protocol
for handling uncashed prize checks. You will see
indisputable proof that the Texas Lottery knowingly
and intentionally kept "abandoned prize monies."
A real no-no. Clearly, the Texas Lottery failed to
comply with statutes, policies and procedures.
What they did to a Texas business owner was
disgusting and disgraceful.

To this day, Oct 22, 2013, NO one at the
Texas Lottery has been held accountable for
failing to do the jobs they were hired to do.
Rather, they continue to receive pay raises.


---------------------

Just in case you forgot ... the Complaint's
allegations included but paraphrased ...


• Management failed to protect State assets
• The prize payment account lacked supervision
• Implied management may be embezzling money
• Implied management was not doing their jobs responsibly
• The Texas Lottery lost/wrote off $600,000 when they changed accounts
• Fraudulent activity continued to occur as management stalled
in opening a new account
• Management personnel - policy breakers - kept their
jobs and received promotions and merit raises

---------------------------

... The Audit Report Has Shown ...
• Who was responsible
• Fraudulent activity did occur
• State assets were not protected
• Repeated absence of supervisory review
• $600,000 was written off in the change of accounts

Incorrect entries were not detected by management
• The length and time errors went undetected was costly
• A host of errors and mistakes were identified in the report
• Management failed to reconcile/maintain the account as required
• Anything was possible concerning the lost/written off money - it
could have been embezzled, could be theft, could be fraud,
and it could be management incompetence.

But remember - in Part 2, I showed you that the
"purpose" stated in the Final Report - that we've
been reviewing - was NOT specific to the
Complaint. The Final Report failed to give a
complete and accurate reflection of the contents
of the Complaint which leads readers to believe
the report appears to be just a typical ole'
annual audit - therefore - you have to have
firsthand knowledge that the Complaint
instigated the report I'm showing you.

Nowhere in the Final Report does it ever say or
confirm DIRECTLY that the allegations contained in
the Complaint were valid and true even though that's
what all this is about and is was certainly confirmed.

-------

---------------------

 

- About Those Un-Cashed Prize Checks -
The Winner's Unlucky Money!

 

Do you remember in Part 1 where I questioned how could the TLC possibly
report uncashed prize checks as required by law to the Comptroller of Texas if
the Lottery was not watching/reconciling their prize payment checking account?

I explained that if a player collected a prize but lost or failed to cash
his check, the prize money still belonged to the player. The Lottery is
required to hang on to the prize money for 3 years then that money
- as required by statute - MUST be turned over to the Comptroller
as "Unclaimed Property/Abandoned Money." The Comptroller
then tries to locate the rightful owner.

In Part 1, I said, "You will also see evidence where it
appears some unclaimed prize monies may have been
used to get that "variance" [shortage] down to the
$622K.
" I did err in this statement in Part 1 by using the phrase
"unclaimed prize money" as I should have said "uncashed checks."

FYI - The Texas Lottery has NO right to keep any paid out prize
money. Once they pay a prize, the money belongs to the person
who received the check (prize). You certainly saw proof of
this in the Willis Willis May 2009 case - this was where the
store clerk stole Mr. Willis' ticket and cashed it in. The
Texas Lottery consistently claimed they paid the rightful
owner because he had possession of the ticket. The
Courts eventually overruled the Texas Lottery
and declared Mr. Willis the rightful winner.
However, the Texas Lottery did not have
to pay the prize a second time, the authorities
are attempting to take it back from the person
who collected the prize.

Intriguing Findings by a Temporary, Highly Qualified,
Well Paid Executive/Consultant/Employee - Mr. T. C. Mallett
A "2003 Uncashed Check Recommendation" was submitted
by Mr. T. C. Mallett who was on a temporary mission working at the
TLC in 2003. His recommendations and findings revealed that the Texas
Lottery had mishandled uncashed checks for a long time - in a
nutshell - they were keeping the money. A real no-no.

FYI - Mr. Mallett was brought into the lottery - twice - Once he was
an Acting Director of Finance then I think he was brought in another time
for some kind of a temporary special project - assignment - if you will.
The only thing I knew for sure was that executive lottery staff were not
happy that he was there in 2003. It was rumored that he had a list
of 30 to 40 things (projects) that he was reviewing and staff wasn't
particularly fond of him nosing around. And he was aware of it too.
But I suppose that's understandable - no one likes an audit
or a snitch - so to speak.

Now Let's Look at Mr. Mallett's 2003 Findings
& His Uncashed Check Recommendations
Mr. Mallett boldly alerted the lottery, specifically Gary Grief &
Mr. Lee Deviney (the newly hired Director of Finance), to
serious problems regarding un-cashed prize payment checks.

In part, Mr. Mallett reported specific problems in identifying un-cashed
checks and failing to turn the monies over to the Comptroller for
unclaimed properties
. Rather, he asserted in writing, the lottery
was keeping prize monies which was a violation of statutes.

Excepts from Mr. Mallett's Memo tells the
WHOLE story as it was in 2003 ...

Hmmm ... Mr. Grief was fully briefed by Mr. Mallett in July 2003.

What? A "portion" had been turned over but the "majority" is still in the account?
Why? I wonder, was the Texas Lottery planning to keep the prize monies
(uncashed checks) rather than to turn it over to the Comptroller. Or maybe,
the Texas Lottery planned to re-classify the "uncashed checks" to
"unclaimed prizes" so they could give it to the state to spend?
They love to boast about the amount of money they've
turned over to the State.

VIP - Let me define "unclaimed prize" here.
Basically there are THREE ways the Texas Lottery may
NOT have paid out on a prize for a winning ticket that was sold.

Only ONE fits the true definition
of the term "Unclaimed Prize"


One
- A player has a winning ticket but he NEVER cashes it in.
This is the money that the Lottery gives to the State - a portion of the
money is given to two teaching hospitals and the balance is placed in the
General Revenue Fund and is spent however the Legislature wants. They
know what winning tickets - from each game- was never validated (paid).
This is the true definition of an "unclaimed prize."

Two
- A player DOES cash in his winning ticket but fails to
cash his check. By law, this money is supposed to be turned over
to the Comptroller of Texas - it's listed as "Unclaimed Property/
Abandoned Money." The Texas Lottery calls it
"Uncashed Prize Checks" OR "Unclaimed PROPERTY"
This is the true definition of an uncashed check.

Three: A player goes to a claim center and submits his claim. The
claim center processes his claim but finds the player has a debt so they
put his claim on hold or pending status. They send him off telling him
they have to "investigate" before they can release any money to him.
This is called intimidation and it works remarkably well.

The law provides specific cases where the Lottery can deduct
a debt from prize monies but there ARE debts that requires
the players permission/approval to deduct
from his prize
winnings. He is still entitled to the prize money but rather than to
pay him, the lottery sends him off without his money. He's ashamed,
scared and embarrassed because he's told everybody that he won
and is going to collect his money. Now he has to come home
empty-handed and he has to reveal that he has a bad debt. Most of the
time, as you can imagine, he wants to forget the ordeal. To him, letters
from the Lottery would be viewed like we view letters from the IRS!!!

Later, the Lottery sends him a letter asking for permission
to deduct the debt and often times the players never responds so the
lottery keeps his money. This TACTIC is WRONG - and the truth
is, they don't really need to "investigate" anything - they KNOW
what's owed when the player is at the Claim Center. Often
times, the bottom line is - the debt in question probably
didn't get paid nor did the player. The Texas Lottery
has literally screwed him out of his prize winnings.

This prize money should have been paid or mailed to the
claimant or turned over to the Comptroller as unclaimed property.
The Player did submit a claim but the Texas Lottery failed to pay him.

This is the same as an uncashed check
or could be called "unpaid claim." Sadly, they
knew who the prize money really belonged to.


Someone of authority should investigate to see how things
are being handled today - did they change their ways?
Perhaps there are some players out there that can answer this
question too. Has this happened to you in the last several years?

Hard to believe that "our" state lottery would behave this way?

OK, OK - I know it is. So here .... read what Mr. Mallett wrote ...


See - I wasn't pulling your leg or telling a fast one!

It is extremely important that you know that IF and WHEN
a player's debt is the kind they can legally deduct, they do it and
pay him whatever might be left over. It's a DONE deal - there is no
intimidation or scare tactics involved - the player and the debt was paid.

This type of claim (#3) shouldn't exist. Period.

OK, now let's move on ... Mr. Mallett provides solutions ...

At the time this was written (2003), Mr. Deviney was the NEW Finance Director
and Mr. Navarro's NEW boss. By reviewing the monies turned over to the
Comptroller in 2004 and 2005, it appears Mr. Deviney took action on
Mr. Mallett's recommendations. (You'll see the details shortly)

--------

Who Was Mr. Deviney & What Happened to Him?
Mr. Deviney was terminated right after the inflated jackpot
issue in the summer of 2005. I've always believed Mr. Deviney was
fired because he alerted Greer & Grief - in writing - that the TLC was
short to fund that jackpot. Mr. Deviney's emails - alerting them that
the jackpot could not be funded legally - was widely reported by the
media - including me. As you will see below, Mr. Grief was the one
who allowed the jackpot to roll to the amount they could not fund.

- Excerpt From ...
June 3, 2005 email(s) between Deviney, Greer, Grief and
Triloni regarding the inflated June 8, 2005 Lotto TX jackpot.

Grief said to Deviney, "We will need to discuss on Monday."
Folks, Monday was too late - Mr. Grief let them promote/inflate
a jackpot amount the lottery could not fund legally. Yet Deviney and
Greer lost their jobs but it was Grief who apparently had the
final say in it that night. Also, if you will recall, the TLC initially
denied being short to fund the jackpot before they finally
admitted it to the AG and the press.

Sorry, I didn't mean to get off track - it's just that I'm the one
who filed the complaint with the AG and I knew the wrong
people took the fall for this incident. My going back to 2003
and seeing that Mr. Deviney complied to Mr. Mallett's
recommendations further convinces me that Mr. Deviney
was treated badly like so many other employees.

--------------------

Back to Mr. Mallett's recommendations ... uncashed checks ...

"Only checks returned in the mail have been turned over to the
Comptroller
" and "remaining uncashed checks may have been
written off
" - To me, writing checks "off" could be considered
THEFT and a direct violation of statutes. Uncashed checks are
- by law - "abandoned checks." Good thing he says, "MAY."

Please notice - Mallett also says, "Otherwise the current balance in the
bank account would/should include a higher than needed balance
.
"
I interpret this to imply the account was in good standing in July 2003.
In fact, I spoke to Mr. Mallett and he said that to the best of his
memory, the prize payment account was in good standing
at that time. There was NOT a problem with it.

Yet Ms. Pyka said the problems in reconciling the
account goes back to the 90's. I don't understand that.
Anyway ...

 

Just For Your Information ...

Sec. 73.102. CHECKS. A check is presumed to be abandoned on the latest of:(1) the third anniversary of the date the check was payable; (2) the third anniversary of the date the issuer or payor of the check last received documented communication from the payee of the check; or (3) the third anniversary of the date the check was issued if, according to the knowledge and records of the issuer or payor of the check, during that period, a claim to the check has not been asserted or an act of ownership by the payee has not been exercised.

 

To make matters even worse ... Mallett writes in 2003 ...

"Previously 'written off'" - None of this money should have
EVER been written off. In my opinion, this is nothing
short of highway robbery.

Maybe this is why the lottery didn't mail those "pending
debts prize checks" out - those checks surely would
have been cashed as the lottery had current addresses!!!!

"Procedures in use by Lottery Operations is turning
over only those checks that have been returned
in the mail
" and one more time, Mr. Mallett says
"otherwise the bank account would be out of balance."
Another implication the account was in good standing in 2003.

"Other checks that have not been cashed have not been included
in the procedure
" - How did the lottery get away with this for so long?
And how are we suppose to know if any of this was corrected?

FYI - The Texas Lottery writes their own policies and procedures.
Seems like an outside agency should be reviewing what they write in
their procedures and policies as they aren't being fair and reasonable.

Notice Mr. Mallett says that after 36 months all persons should be directed to
the Comptroller for possible payment for an uncashed check? Did you know
that IF a player calls from 3 or 20 years ago, Claim Center Staff is supposed
to contact the Finance within the Lottery - FIRST - to make sure that the
player's money was actually sent to the Comptroller. I think this speaks
for itself. This means their books are in such a mess that they
don't know what they've done and if they've complied with
statutes by sending the players money over timely.

"business practices elsewhere as required by statutes" - any business who issues
checks or holds monies in accounts that is considered abandoned is required to
send the money to the Comptroller of Texas. This includes the Texas Lottery.

"there will be an affect on the Foundation School Fund" - these are the
magic words that really tells the story
. The Texas Lottery loves to
tout how much has been sent to the State and they want every penny
they can possibly raise - legal or not, moral or not, ethical or not.
But they want you to believe they have "Integrity."

-----------------

- It's Established! -
Uncashed Prize Checks Must Be Turned
Over to The Comptroller of Texas

------

 

Another unbelievable but TRUE story ...

About This Next Editorial
I heard about this claim from unknown sources about year
and a half ago. Since then, I have obtained numerous documents
that have fully supported most of what I heard. This story is
disturbing to say the least. To me, and in my opinion, the actions
taken show the Texas lottery premeditated, willfully, intentionally
and purposely kept monies that was NOT theirs to keep. And
I purposely let them go all the way before exposing this story ...

This story is as bad as my cheated winners story from many years ago.
As a result of my findings here, I will be returning to the Lotto Texas
cheated winners - they were not paid the percentage that was due them.
What I've done and am doing with this 2012 Audit Report - well, I intend
to do exactly the same thing with both the TLC's Audit Report and
the State Auditors report regarding cheating those players.

Opinions ... some conclusions ... and some speculation
that is expressed here are those of Dawn Nettles.
The rest is PURE facts.

 

- 30.8 Million Tickets Printed - Bonus Cashword - Only 47 Top Prizes -
- Lucky Waco Woman Gets One and Wins $35,000 -
But the business who cashed her check got screwed ...

(To respect the winner's wishes - as per the claim form - I am
not going to reveal her identity. It's not necessary anyway.)

A Waco woman traveled to Austin on April 18, 2008 to collect and
did collect $35,000 - the top prize from Bonus Cashword #1097.
The Texas Lottery declared the ticket a winner and validated her claim.
There was never a dispute of any kind as to who the ticket belonged to.

Her check, less $8,750 deducted for taxes, was a whopping
$26,250. Can you imagine the thrill of suddenly having $26,250 in
your hot little hands? Boy, how exciting that must be. Anyway,
the Texas Lottery did give her a W2-G and the Texas Lottery
did pay her taxes to the IRS.

So she goes home and a friend cashes the check for her.
She endorses the check so her friend takes the check to
a local business and gets it cashed.

Everyone is happy.

BUT, the business owner misplaced and/or ultimately lost the check.
So the business owner does the logical thing - she calls the Texas Lottery
and explains to them that she cashed the check and needs a replacement check.

Oh lordy - this was a HUGE, HUGE, HUGE mistake. Granted, it shouldn't
have been a mistake but to someone like me, I know way too much about
the Texas Lottery and how they handle claims, pending claims, phone calls,
disputed claims and how they stall players before paying claims. I saw
the handwriting on the wall as I was hearing this story. I knew
exactly where the story teller was going.

OK - OK - I won't go there. When legal received this call from
the business owner who misplaced the check, the Texas Lottery
SHOULD have told her that she would need to contact the claimant and
the claimant could get a replacement check for her. The Texas Lottery
SHOULD have made it very clear that they could NOT issue her a check.
Further, they should have just contacted the winner at that time so the
winner could have handled the situation. Which would have been the end
of it. Not to mention the Integrity and Honesty this act would have shown.

But did they do this? Hell NO. They stalled the business owner by telling
her that they would need to check into it and would need to investigate
first. In reality, the only thing they needed to "investigate" was to call
and see if the check had cleared the bank. Knowing them and from
many winners stories, they probably told her they'd get back to her too.

So they waste taxpayer money and time by sending an investigator out to
interview the claimant where they obtained a signed statement reflecting that
she did cash her check and she was the winner. They also interviewed
the winner's friend who actually cashed the check for her.

After all this, the Texas Lottery contacted the winner and asked if
she would be willing to come in with the business owner to pick up a
replacement check. The winner said, "YES, absolutely. Just tell
me when
." The lottery tells her that they will get back to her.

Well, you guessed right. The Texas Lottery NEVER did get
back to her. The winner was left to think/assume that the
business owner must have found and deposited the
check or she thought that the Texas Lottery simply
wrote another check. Bottom line, the winner was
under the impression that everything was OK.

Hmmmm ...

It would seem that the Texas Lottery was taking it upon themselves to
make sure there was no hanky panky - in other words - they were
making it seem like they were trying to protect the business owner
in their call for the player to "maybe" come in for a replacement
check. But as it turns out, it was the Texas Lottery that could not
be trusted to do the right thing. Seems like the Texas Lottery
tries to keep whatever they think they can get away with.

Did they make that call to the winner in hopes that she would eventually
conclude the business who cashed her check was taken care of? The
TLC did - after all - have her sign a statement that she got her money.
So it stands to reason that the winner could have easily concluded
that the Lottery took care of the business owner when the lottery
didn't call her to come back in for another check. Could this
be construed as a premeditated plan to keep that money?

It Is None of the Texas Lottery's Business
Let me be very clear here. The Texas Lottery overstepped
their boundaries. It was none of their business with what did
or did not occur between the winner, her friend or the place that
cashed the check. It still isn't their business. They had absolutely
NO rights to go to that winner to have her sign anything. The
ONLY thing that was the business of the Texas Lottery was that
one of their checks did NOT clear the bank. They did not do
what they were rightfully and legally suppose to do with that
money. This is the SECOND case where I know that they
intentionally interfered - butted in - with a winner's money.
And it was to the lottery's financial advantage too. Very sad.

-------

Well, after all this and 3 years later, the Texas Lottery officially
decided on Aug 18, 2011 they would just keep the money for
themselves. Then, days later - because they KNEW the check
was either "misplaced" or "lost" - they safeguarded themselves
- they stopped payment on the check on August 29, 2011.
What perfect timing too - this action put more money in the
legacy account and just in time to close out their fiscal year.

Hmmm ...

By statute, they are required to send a letter to the
winner giving the winner 30 days to come forward with
regards to this check. I wonder, did the Texas Lottery
perform due diligence by sending such a letter prior to
making this decision?

- I Surmise -
Lottery staff likely reasoned to themselves - "The
winner got her money and the business most likely wrote
the loss off their tax return. Maybe the business is out of
business or the owner is ill, deceased or moved. The
winner certainly shouldn't get it twice and we
need this money so we'll just keep it.
"
<grin - but not really funny if this
is how they really thought >

-------

Folks - this was an UNCASHED prize check and the
money should have been turned over to the Comptroller on
July 1, 2011. No matter what the circumstances were.
After 3 years - the money is considered abandoned. Period.
April 2009, April 2010, April 2011. Yep - that's 3 years
since the check was issued in April 2008.

Now let me show you the documents to support what
I've just told you. They validated the ticket as a winning
ticket, paid the claim, paid taxes for her, stopped payment
on her check, never issued a replacement check but never
turned the funds over to the Comptroller even though it
was an UNCASHED prize check. If all this isn't bad
enough - they labeled the check as "unclaimed" rather
than "uncashed" in their journals which - to me - and in
my opinion - is falsifying a document.

Here we go ...
The Official Claim form submitted ... Proof there was/is a claim ..

IF you'll look in the upper right hand corner of the claim form, you will see
that this claim was paid on April 18, 2008 - check # 3536768. The prize
amount was $35,000 but the Texas Lottery deducted 25% for taxes
making the net amount of the check $26,250. To collect prize
money, a player must sign the back of the ticket and submit
the ticket with the claim form. As you can see, this was done.

According to the official claim form, a check
was issued to her in April 2008.

In May 2012 (year not a mistake) - I tried to obtain a copy of
the canceled check. After much ado - in a letter dated Aug 8, 2012,
I received the following response from Open Records ...

Hmmm ... no canceled check ... Exactly what I heard.
That check never cleared the bank.

Equally important, my open records request actually alerted the
Texas Lottery that something was amiss about this claim. They
could have corrected this situation a long time ago. Instead,
they gambled that I'd never get to the bottom of it. Guess
greed and desperation overrules honesty and integrity
and they underestimated me and my tenacity! <grin>

Remember too, Aug 31, 2012 was the day they secretly
wrote off the $622K and Nov 2012 was when staff gave
the Commissioners the Final 2012 Audit Report.
This should help you to understand why I
just said "greed and desperation."

So, I wondered, "OK- well, maybe the Texas Lottery
issued a replacement check to this woman or the
business owner who misplaced the check?
"

"After a reasonable search of our records, we are
unable to locate any documents responsive to your request
."

Hmmm ... gee, no replacement check was written.

Well, surely they stopped payment on the check -

Then the Stop Payment was released ...

Yepper ... they stopped pay on Ck #3536768 on Aug 29, 2011.
But, but ... why Aug 29th, 2011 - shoot - they decided to
keep that money on the 18th of August, 2011 ... Hmmm ...

(Before I show you where they decided to keep the
money on Aug 18, 2011, let me show you this first
)

Well, OK. Maybe the Texas Lottery turned the money over to the
Comptroller of Texas in 2011/2012 since they stopped payment
on the check. So, on Sept 13, 2013, I asked the Comptroller
if the Texas Lottery had turned the player's money over to
them as unclaimed property (an uncashed prize check).
Their letter, dated Sept 26, 2013, said in part ...

It is extremely important that you know that I verbally
stated that the money I was looking for was a net amount
of $26,250. They knew this even though neither writing
indicated that amount. I've got to say - which is off the
subject too - that working with the Comptroller's Open
Records has been a very pleasant experience. They talk to
you where as the Texas Lottery won't. Imagine that. <grin>

Please do not think that I actually thought the money
had been turned over - the truth is - I really knew
that the Lottery had kept her money but I had to go
through the verification process. I'd been searching
for this money for over a year.

Now I needed to find out where the money went.
I heard it was used to reduce the shortage in the Prize
Payment account. So I go in search of papers to prove
what I heard. And boy, did I ever face opposition!
Here's a series of emails between myself and the Texas
Lottery then ultimately to the AG and Members of the
Texas Legislature. This was an Open Records nightmare!

My original request for the document
that would show where this money went ...


9-17-13

Katelind, I would like to receive a copy of the
Aug 2011 Journal Voucher showing funds written off.

 

Texas Lottery Responds

9-24-13

Ms. Nettles:
We need clarification on this request shown below.
We had previously sent you the General Ledger entry
for August 2012 showing funds written off. (See attached email).
Are you now seeking the same type of information for August 2011?

Please let me know.

I reply - 9-24-13

Yes, that is what I asked for.

 

 

Texas Lottery Responds

9-28-13

Ms. Nettles:

This email is in response to your Public Information
Request received September 18, 2013.

You requested: “I would like to receive a copy of the
Aug 2011 Journal Voucher showing funds written off.”

After a reasonable search of our records
we are unable to locate any documents
responsive to your request.

I respond ...

10-5-13

Katelind,

Regarding your statement below, "After a reasonable search of
our records we are unable to locate any documents responsive
to your request.
" - I would strongly urge the Texas Lottery to look again.

Let me revise the request to say, I would like to receive
copies of any/all Texas Lottery Commission Journal Vouchers
dated between Aug 10 - Aug 25, 2011. I'm revising the
language just in case the Commission is using
a play on words to keep it from me.

I will be faxing the AG a copy this message as I believe
documents exist that should have been sent in response
to my original request dated Sept 18, 2013.

 

Texas Lottery Responds ...

10-14-13

This email is in response to your Public Information
Request received October 7, 2013.

You requested: "I would like to receive copies
of any/all Texas Lottery Commission Journal Vouchers
dated between Aug 10 - Aug 25, 2011.
"

With respect to your request, we have determined
that the cost to produce such information will be in
excess of $40.00. Pursuant to Texas Government Code,
Chapter § 552.2615 we have attached an estimate
of the cost to provide the documents.

 

My response ...

10-14-13

Katelind,

Well this is interesting. You went from "no documents
responsive
" to a cost of an est $103.50 to research
my original request dated Sept 17, 2013.

OK. So, let me revise the request for a third time
to be a lot more specific to see if we can reduce the
costs and get the original document that I requested
initially without stalling or deceiving me any longer.

I would like to receive copies of all Texas Lottery Journal
Vouchers that are dated August 18, 2011 prepared by
Michael Guidry and approved by Kelly Stuckey that deals
with check #3536768. Please include the screen shot
of the check and any other documentation that would
accompany the voucher in question. Please do not
alter the document in any way.

I am faxing the AG a copy of this response. I need this
document NOW and there is no doubt as to its existence.
How long does the law allow the Texas Lottery to play
these games with me including denying the existence
of a document that is readily available?

It is becoming more and more apparent to me that the
Texas Lottery will go to any lengths to cover up
inappropriate - perhaps illegal - actions.

FYI - I also contacted and asked a number
of Texas Legislators for assistance.

FYI - It is my belief that this money - was written off from
one account and the funds were placed into another acct thus
increasing the balance in the acct to reduce the shortage.

 

 

Oct 16, 2013

Finally received document in question.
They are shown next ...


Texas Lottery Journal Voucher - Dated 8/18/11 -

As I understand it ....
This document shows they are debiting the old dormant "legacy" account
and crediting the new account. This way they could move the funds into the
"unclaimed funds acct" that will be turned over to the State - specifically the
General Revenue Fund. Also, because the new acct was being closely
monitored, they could say they found additional monies that came
from the old account - because they "voided" a check - thus
reducing the shortage on their books and giving the state
money that wasn't expected.

. Under "Game Code" it does identify game #1097 and the
check number does match the check number on the claim form.

Pay special attention to the "Description"



Folks, this was NOT an "unclaimed" prize check The check
was lost - misplaced and they KNEW it in 2008. Would one be
prudent to think of this as an example of falsifying documents?
If Texas Lottery staff can not speak lottery language/lingo
correctly - then they should not work there.

It was an "UNCASHED" prize check - by law
it's defined as "Abandoned Money"

There is no such thing as an "unclaimed prize check" as
NO checks are issued without a name to put on the check.
Checks aren't written unless they have a name and a claim. They
either have a claim form or a signed ticket prior to writing a check.

And why did they write "voided" rather than "stopped pay?"
There is a HUGE difference in the language. To me,
"voided" means they never issued a check - they messed
it up so they need to "void" the check number. You
can't "void" a check that is out there in the world
just waiting to be cashed. You have to stop
payment on it to ensure it's never cashed.
I consider the language deceiving too.

Looks like they are being deceptive in their record keeping too.

-------------------------------

By all rights and in my humble opinion -
it's time for outside investigations that
could result in prosecutions.

This is just one more winner's story to add to
my list. I could write a book on the things the
Texas Lottery has done to players/winners.

I Wonder?
How much prize money (uncashed checks) was used to reduce
the differences between what the bank said the lottery had in their
account versus what the lottery "thought" they had in the account?

Remember - the variance was as high as $1.89 million
and somehow they reduced it to $622K by Aug 31, 2012.
That's when they quietly wrote off $622K.

---------------------------------

Does the Comptroller have money that you forgot about?
Go see (Comptroller of Texas website) and collect! Click here.

 

----------

 

 

Moving Forward - Uncashed Checks -
What Became of Mr. T. C. Mallett's Recommendations?


In 2004 and 2005, records indicate that Mr. Lee Deviney, the new
Director of Finance, (Finance is now known as the Office of the Controller)
got busy and identified the checks referenced by Mallett. In Mr. Deviney's two
year reign, $68K was sent as Unclaimed Property to the Comptroller.
(You will see the actual submissions shortly)

Ms. Kathy Pyka replaced Mr. Deviney in Sept 2005 which was
FY06. In light of the problems with the account not balancing
[it was $187K off at that time], Mr. Grief sent the following
email to Ms. Pyka on Jan 26, 2006 2 pm (#1) and
Ms Pyka acknowledged receipt, 2:54 pm (#2) ...

It appears Mr. Mallett's recommendations were fresh in Mr. Grief's
mind in 2006. What I wonder, is why did Mr. Grief advise her
to only "scan" the material?

----

Now interestingly the 2012 Internal Audit Report,
covers uncashed checks too. As you will see from the
excerpt, they reported there were no problems in
turning unclaimed property over to the Comptroller
after Mr. Mallett's findings in 2003. See ...

- Excerpt Page 7 -
2012 Texas Lottery Commission Internal Audit Report


As you see, the excerpt above from the 2012 Audit Report claims
the Texas Lottery was in compliance in the years 2006, 2007, 2008.
Gee, this looks really impressive - huh?

Baloney. What a bunch of crap this is.

Three (3) reasons I dispute what's being reported here.

1) They claimed "teams" were working to reconcile the acct
beginning in 2006 - so why didn't they identify and send
the uncashed checks from 1999 - 2002 to the Comptroller as
unclaimed property prior to 2009? There were big, high dollar
uncashed checks dated 1999, 2000, 2001, 2002, 2003
that they sent to the Comptroller in 2009. Tell me, why
wasn't this money found and sent in 2006, 2007, 2008?

- Excerpt - 2009 Texas Lottery Report To Comptroller -
Shows TLC's Uncashed Checks turned over in 2009
Needless to say, most of them were very late!


2) How can anyone believe staff was finding
"uncashed checks" while "fraudulent" checks were
clearing the account and not being caught in
2007 & 2008? They have to reconcile an account
before they can tell what hasn't been cashed.

Sorry, but it is IMPOSSIBLE, in my humble opinion,
for them to have been in compliance in 2006, 2007, 2008..

If #1 and # 2 reasons above aren't convincing enough
for you, then let's compare the dollar amounts sent.

3) In 2006, they only sent the Comptroller $3,156; in 2007,
they only sent the Comptroller $2,295; in 2008, they only
sent the Comptroller $2,967.

But in 2004 they sent $45,461, in 2005 they sent $23,225
and in 2009 they sent $44,316. Interesting, out of the
$44,316 sent in 2009, 29% should have been
sent in earlier years.

Hmmm .....

(Below, in my chart, are links so you can see what
was actually turned over as "unclaimed property"
)

Notice the Disclaimer under the chart too ...
In my opinion, the "disclaimer" as good as
disputes their findings. Also, VIP - the language
"outstanding checks" means "uncashed checks."

The Details - If You Wish To See Them
You can open each one of the files to see exactly
what was sent to the Comptroller. Who knows, maybe
you'll see your name listed!!

2001 - 2012
Uncashed PRIZE Checks
Turned Over To The Comptroller


Finance

Director

Texas Lottery
Files

Comptroller
of Texas
Files

Total
Amount
TX Lottery
Sent To

Comptroller
Sanchez 2001 - Excel
$4,196 - 5 checks in
excess of $500
Can't give total amount
sent because I only
requested checks
over $500.
2001
Did not request
2001
??
Sanchez 2002
No documents
responsive
2002
Did not request
2002
??
Sanchez/
Mallett/
Deviney
2003 - Excel
$1000 - (one check
in excess of $500)
Can't give total amount
sent because I only
requested checks
over $500.
2003
Did not request
2003
??
Deviney 2004 - Excel
(35 checks in
excess of $500)
Received Two Files
2004- Excel
2004 - pdf -
(pdf shows
total $$ only)
2004
$45,461
Deviney FY05
Pyka FY06
2005 - Excel


Received Two Files
2005
(Excel)
2005 (pdf)

2005
$23,225
Pyka 2006
No documents
responsive ...
meaning no checks
in excess of $500


Received
Two Files

2006
(Excel)
2006 (pdf)

2006
$3,156
Pyka

2007 - (Excel)

2007 (Excel)
7 checks total
2007
$2,295
Pyka 2008 - Excel
2008 (Excel)
7 Checks total
2008
$2,967
Pyka 2009 - Excel
2009 (Excel) -
535 checks total
2009
$44,316

Pyka

2010 - Excel
2010
Can't release
2010
$8,480
Pyka 2011
Did not
request
2011
Can't release
2011
$7,267

Pyka

2012
Did not
request
2012
Can't release
2012
$3,431

 

- Let me clarify what I requested from Open Records -
From the Texas Lottery Commission
I only requested checks in excess
of $500 that was sent to the Comptroller
as abandoned money.
From the Comptroller of Public Accounts (Texas)
I request all monies turned over as abandoned
money from the Texas Lottery Commission
from 2004 - thru date

 

It appears to me - by reviewing the records - that the Finance Division -
under Mr. Deviney's direction between 2004 - 2005 - got busy and
identified all the OLD uncashed checks that Mr. Mallett referenced
in his 2003 memo. After Mr. Deviney left, it looks like the task
went to hell in a hat basket. It is my opinion that in 2008 when
they realized fraudulent activity was occurring - well, it lit their
fire and they finally HAD to get to work.

Don't forget, the bottom line was they secretly wrote off
$622K in 2012 and they can't explain where the money went.

Garbage in, garbage out ...

Interestingly - I found some discrepancies in what the
Texas Lottery reported as sending to the Comptroller
for uncashed/abandoned checks versus what
the Comptroller says the Texas Lottery
reported to them. Imagine that!
Let me show you ..

This is what I received from the Texas Lottery representing
uncashed checks greater than $500 that they say they
sent to the Comptroller in 2007 ....



As you can see, the Texas Lottery listed only one check in
excess of $500 for 2007 - it's Mr. Morehead's $3000 check.

But, oddly Mr. Morehead is not listed in the 2007 file
provided to me by the Comptroller (Exhibits A & B below).

Shoot, as far as that goes, they didn't even send $3K that year!

Also, the Comptroller shows a check for $700 (Reynaud)
that the Texas Lottery did not disclose to me. (Exhibit B). Hmmm ...

-Exhibit A- 2007

Finally, notice that the Texas Lottery apparently gave the
Comptroller the wrong zip code for one of the claimants - I
really don't think the zip code is the same in Victoria, TX
as it is in El Paso, TX (sarcastic remark - <grin>).
(See last two entries below - Exhibit B)

- Exhibit B- 2007


See original files ...
Comptroller file 2007 (Excel)
Texas Lottery file 2007 file (Excel)

In Concluding Part 6

Ms Pyka and her direct contacts (managers) are
highly paid yet it appears the work in the division is
inaccurate, sloppy, costly and not timely.

The 2010 Complaint sent to the State Auditor alleged in part,
"This worries me in that the people in charge of money for
the school fund are not being very fiscal responsible ...
."

I believe Part 6 - as well as earlier Parts - have confirmed this
allegation - at least this is my opinion based on my findings.

- Coming in Part 7 -
Finally you will see how much money the state pays the
individuals who are/were DIRECTLY responsible for
this entire series of events and loss of money to the state. I
personally believe there is favoritism and personal relationships
amongst these individuals that should not exist in business.
You have had a first hand look at their work ethics, their ways
and their beliefs of how to conduct business at our State Lottery.
You will be the judge and jury regarding fairness in salaries
and if the salaries are justified. I will simply give you the facts.

--------

Does the Comptroller have money that you forgot about?
Go see (Comptroller of Texas website) and collect! Click here.


-------

Texas Lottery Commissioners
Chair J Winston Krause (Appointed March 2009)
Jodie Baggett (Appointed Sept 2013)
Katie Stavinoha (Appointed Sept 2013)
John W Townes (Appointed Dec 2013)
Mary Ann Williamson (Resigned 8/16/13 - Re-appointed 3/11/14)

Commissioner Veronica Edwards (Resigned 2/13/14 - Effective 3/31/14)

-----------------------------------------------------

Series Began: August 1, 2013
Part 1: Posted August 1, 2013
Part 2: Posted August 4, 2013
Part 3: Posted August 7, 2013
Part 4: Posted Aug 13, 2013
Part 5: Posted Aug 20, 2013
Part 6: Posted Oct 22, 2013 - Below
Part 7: Posted March 13, 2014
Part 8: Posted April 6, 2014
Part 9: Posted ??, 2014
Part 10: Posted ??, 2014

 

 

Email

Texas Lotto Report
(All About the Texas Lottery)

Dawn Nettles
P. O. Box 495033
Garland, Texas 75049-5033
(972) 686-0660
(972) 681-1048 (Fax)

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