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Cedar Rapids, Iowa 52401
State lawmakers gave Iowa Lottery officials high marks Tuesday for the way they handled the mysterious circumstances surrounding a winning Hot Lotto jackpot that went unclaimed when attorneys representing a trust that turned in a valid ticket withdrew a claim for the multimillion-dollar prize last week.
“That's the damndest thing I've every heard of,” Sen. Tom Courtney, D-Burlington, said after lottery officials walked members of the Legislature's Oversight Committee through a 13-month saga that began when a Hot Lotto ticket valued at up to $16.5 million matched the grand-prize numbers drawn on Dec. 29, 2010, and was turned in a year later less than two hours before the jackpot was slated to expire bearing the name of a New York attorney who was acting on behalf of an investment trust based in Belize.
Iowa Lottery chief Terry Rich said his agency met with attorney Crawford Shaw on one occasion, but he was unable to provide the information necessary to verify that the ticket was legally purchased, possessed and presented for validation. Eventually, the claim by Hexham Investment Trust was withdrawn, but the events surrounding the unusual situation triggered a criminal probe by the state Division of Investigation and the Iowa Attorney General's Office, which is still ongoing and prevented Lottery officials from providing state legislators with all the answers they sought during Tuesday's hearing.
“From our standpoint, this case is closed,” said Rich, who told lawmakers his authority was as transparent and upfront with Iowans as they could be to protect the integrity of the lottery and he believed the system worked as it should even though the outcome left people hanging.
“I feel very comfortable with the rules you have set up,” the lottery chief told Oversight Committee members who peppered Rich and his legal, investigative and support staff with “what if” questions that led to an unknown claimant walking away from a potential $10.75 million cash payment after taxes or an annuity that could have provided a valid winner annual payments of $400,000 for 25 years.
Lottery officials had set a 3 p.m. Friday deadline last week for attorneys representing Hexham to provide them with basic information about who bought the winning ticket and some of the circumstances surrounding the year-long wait for the signed ticket to be turned in for validation so they could determine if was legally purchased, legally possessed and legally presented.
The Iowa Lottery received a letter from the Davis Brown law firm in Des Moines specifying that if the jackpot were to be paid to the trust, that all of the winnings would be donated to charity – minus attorney fees. However, lottery officials declined to pay the prize because required information was not provided.
“Like a lot of Iowans, we want to know what went on here, but it seems to me that the system works and it's worked in this case so far, at least based on what we know,” said Rep. Chris Hagenow, R-Windsor Heights, an Oversight Committee co-chairman. “It seems to me that everything works. We're talking about big dollars. I think based on what we heard that people should have high confidence in the integrity of the Iowa Lottery. I'm satisfied that they're conducting themselves the way they need to on behalf of the people of Iowa.”
Courtney praised Lottery officials for the way they handled the intrigue but said lawmakers will “keep watching it ‘til the game's over” and will expect lottery officials to fill in whatever blanks they can later once the criminal probe is completed – assuming that those details can be uncovered and provided to the citizens of Iowa.
“I think they have the right to know what happened,” he said. “This is big money and every time there's big money you've always got to wonder but I think it's been handled properly.”
Iowa Lottery officials had set a 3 p.m. Friday deadline for attorneys representing Hexham to provide them with basic information about who bought the winning ticket and some of the circumstances surrounding the year-long wait for the signed ticket to be turned in for validation so they could determine if was legally purchased, legally possessed and legally presented.
The Iowa Lottery received a letter from the Davis Brown law firm in Des Moines specifying that if the jackpot were to be paid to the trust, that all of the winnings would be donated to charity – minus attorney fees. However, lottery officials declined to pay the prize because of concerns about the legality of the purchase, possession and presentation of the ticket.
Iowa lottery officials say the state's $1.3 million share of the unclaimed jackpot will be rolled into a promotion in which about $1.9 million in unclaimed money will be given away to Iowa Lottery players. Details will be announced later this spring.
As part of Tuesday's presentation, Rich said the lottery is coming off a strong sales year that generated a record $68 million in proceeds to the state's general fund. He said projections call for sales totaling at least $277.6 million in the fiscal 2013 with proceeds to the state expected to top $60 million.