Lottery ticket turmoil

by The City Wire staff ([email protected]) 181 views 

The next step in the embarrassing theft scheme unearthed at the Arkansas Scholarship Lottery looks like an outdoor fracas between two drunken red-necks. Lots of yelling or posturing for action. But very little actual blows being exchanged.

And just like that parking lot “throw-down,” this recent episode is yet another embarrassment to Arkansas and the Arkansas Scholarship Lottery.

To catch everyone up on the antics we speak of, here is a capsuled history.
When Arkansas voters approved the lottery, complete with scratch off tickets, the state hired a former South Carolina state Senator, Earnie Passailaigue. He brought with him a plethora of South Carolinians with him – including a security expert named Remmele Mazyck.

Remember that name.

Seems like Passailaigue did everything to make Arkansas law makers, vendors and even lottery players angry. He did, however, get the lottery off the ground. It made money. Lots of money.

Scholarships were handed out to more students than ever to attend college courses in the state.

There were some hiccups.

Passailaigue was an elitist snob. He was paid more than $350,000 – a big time salary if you are not coaching a college football player – and he hired a rag-tag-bunch of Arkansans and others – that soaked the state in overtime and bonus pay.

There were questions about the lottery’s sustainability and management. After a while, Passailaigue left Arkansas and returned to the Palmetto State.

Lottery proceeds, as everyone was warned about, started to decline. Talks of restructuring the checks to college bound students were cussed and discussed.

Lawmakers did breathe a little easier with Passailaigue gone. Things didn’t look as rosy as solons and college administrators wanted, but still the cash rolled in and students enrolled in classes.

And then a security officer was caught stealing scratch-off tickets. Lots of tickets.

Mazyck, who worked as a deputy director of security from July 2009 to November 2012, admitted to cashing 22,171 lottery tickets for a total of $478,073 between November 2009 and last October. That’s a lot of scratching for a lot of money.

Bishop Woolsey, head of the Arkansas Scholarship Lottery, vows there won't be a repeat of a theft scheme like the one a former security official for the agency recently admitted perpetrating. That’s pretty tough talk after the scheme which ran almost three years and $500,000 is discovered.

But it should be pointed out that the scheme was not as long on Woosley’s watch as it was on Passailaigue – the man who brought this security expert Maczyk to Arkansas.  And the thief, Maczyk, according to court documents, bought even more tickets with his illegal winnings, but ended up losing most of the $478,073, if not all  of these ill-gotten gains.

“I want to give assurances to the commission and the public that this is not something that will happen again," Woolsey said, noting that the system worked as it should to ultimately cause Mazyck's scheme to "come crashing down fairly quickly."

Mazyck, was fired in November after he failed to show up to a meeting set to discuss the allegations. He admitted recently in federal court that he cashed $477,893 from thousands of winning, stolen tickets; exploiting a computer security system he could access to change the status of the pilfered tickets to "promotional."

Few Arkansans plunking down their $1, $2, $3, or $5, $10, or $20 for scratch off tickets ever got a “free” or “promotional” scratcher. These are tickets free for the asking, not a free ticket as the result of a scratch-off ticket purchased where a free ticket was the prize.

Woosley said Monday the lottery has moved to do away with promotional tickets, which were given away at events such as Riverfest to draw players to the lottery.

"I feel confident we've covered all our bases and we are a better agency for this having happened," he said.

Mazyck faces up to 20 years in prison and a fine of up to $250,000 on the wire fraud conviction and up to 10 years and a $250,000 fine on the money laundering conviction.

Now this week comes a class-action lawsuit alleging lottery officials knowingly misled people about the odds of winning prizes on scratch off tickets. Two Little Rock attorneys – Lawrence Walker and state Rep. John Walker, a noted civil rights attorney, have filed the action. The suit claims the lottery has “been unjustly enriched,” as after the theft last October, the Arkansas Scholarship Lottery did not update the odds to reflect the theft of the 22,710 winning tickets that were cashed by the former security director.

Two of the plaintiffs named in the suit allege that the Lottery Commission “harmed the integrity of the games.” Lottery officials are hoping an insurance policy for errors and omissions and theft will reimburse the Arkansas Scholarship Lottery for the amount of money it alleges was stolen.

Good luck with that claim.

Overall, it’s just more embarrassment for the state courtesy of  the Arkansas Scholarship Lottery.