Iowa Lottery officials set Friday deadline for Hot Lotto claim

UPDATE: If Iowa Lottery officials don't know by Friday who bought a jackpot-winning Hot Lotto ticket, the $14 million payout will be denied.

Lottery officials set a deadline of 3 p.m. Friday to find out who bought the ticket and who makes up Hexham Investments Trust, the group that owns the ticket.

"The names of the people from Hexham Investments all the way down to the person who bought it at QuikTrip is what we need to find out now," said Iowa Lottery CEO Terry Rich. "We want to make the decision to give everyone some closure."

So far the Iowa Division of Criminal Investigation is not pursuing criminal charges, but that may change based on what information is produced by Friday, Iowa Lottery Spokeswoman Mary Neubauer said.

"It remains to be seen where their work will take them," she said.

This is the first time the Iowa Lottery has set such a deadline, but this case has been unusual from the beginning.

Crawford Shaw, 76, of Bedford, N.Y.,  turned in the winning ticket Dec. 29 on behalf of Hexham Investments. The ticket arrived just hours before the deadline for collecting the jackpot, which, after taxes, would be worth $7.53 million in a lump sum payment or $400,000 annually for 25 years.

The ticket was purchased Dec. 23, 2010, at a QuikTrip in Des Moines.

Shaw and attorneys from a Des Moines law firm met Jan. 17 with Iowa Lottery officials, but Shaw would not identify who bought the ticket and who was part of Hexham Investments, Neubauer said.

The Gazette reported last week that Shaw is accused of defrauding an East Coast company. He is one of more than 30 defendants are named in an adversary proceeding within a Delaware bankruptcy case.

The April 30 proceeding, similar to a lawsuit, alleges Shaw and his co-defendants conspired in a “large-scale scheme” to loot a New York-based automotive chemicals company of tens of millions of dollars. Losers in the scheme, according to the lawsuit, were investors that included an Ohio teachers' pension fund.

"What does any of that have to do with the jackpot-winning ticket?" Iowa Lottery's Rich said in a prepared statement Monday. "We don't know; it could be nothing. But the fact that the information exists means it is something that the Iowa Lottery will need to review."

Rich said Monday he has no doubt the ticket Shaw presented is real.

If the prize is denied, it would be a first for an Iowa Lottery jackpot, he said. The lottery has refused a payout in the case of an underage person who won a smaller prize.

Shaw has not returned two phone calls from The Gazette seeking comment about the bankruptcy allegations. He has not been named in any criminal charges.

Dave Button, who leads the DCI's gaming bureau, said his office will not consider an investigation of the Hot Lotto jackpot until after learning what information comes out before Friday.

"We won't know between now and then what information will come forward," Button said. "Until that point, it's all premature."

As far as criminal charges relating to the Iowa Lottery, the DCI could consider any section of Iowa Code, Button said.

Iowa Code Section 99G.36 describes forgery and fraud charges related to Iowa Lottery tickets.

"A person who, with intent to defraud, falsely makes, alters, forges, utters, passes, redeems, or counterfeits a lottery ticket or share or attempts to falsely make, alter, forge, utter, pass, redeem, or counterfeit a lottery ticket or share, or commits theft or attempts to commit theft of a lottery ticket or share, is guilty of a Class D felony," the code states.

A Class D felony is punishable by up to five years in prison and a fine of up to $7,500.