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Ontario Provincial Police (OPP) Insp. Bill Price announce the arrest of three people, Kathleen Chung, Jun-Chul Chung and Kenneth Chung, in a case of lottery insider fraud at a press conference in Toronto on Wednesday, September 29, 2010. (Adrien Veczan / THE CANADIAN PRESS) OPP Commissioner Chris Lewis announces the arrest of three people, Kathleen Chung, Jun-Chul Chung and Kenneth Chung, in a case of lottery insider fraud at a press conference in Toronto on Wednesday, Sept. 29, 2010. (Adrien Veczan / THE CANADIAN PRESS) Paul Godfrey, chairman of the board of the Ontario Lottery and Gaming Corporation (OLG), comments the arrest of three individuals by the Ontario Provincial Police (OPP) at a press conference in Toronto on Wednesday, Sept. 29, 2010. (Adrien Veczan / THE CANADIAN PRESS) Chris Lewis, head of the OPP, speaks at a press conference in Toronto on Wednesday, Sept. 29, 2010. Chris Lewis, head of the OPP, speaks at a press conference in Toronto on Wednesday, Sept. 29, 2010.

Police seeking rightful lottery winner in fraud case

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CTV News Video

CTV National News: Omar Sachedina reports
A father and his two adult children are accused of stealing a multi-million dollar winning lotto ticket. Police are now trying to track down the person whose life-changing stroke of luck was taken away.
CTV Toronto: Austin Delaney on the scammers
The OPP have arrested three over a $12.5-million lottery scam, and they hope to find the rightful winner. Austin Delaney reports.
CTV Toronto: Paul Bliss with reaction
The opposition is warning that with Ontario's push into Internet gambling, cheaters and scams are sure to follow. Paul Bliss reports.
CTV Southwestern Ontario: Joel Bowey explains
Police have laid charges against three family members who operated a Brantford convenience store in connection with an allegedly fraudulent lottery win seven years ago.
CTV Toronto: John Musselman explains
Three Thornhill family members are accused of stealing a $12.5 million lottery ticket.
CTV Toronto: John Musselman on the arrests
OLG Chairman Paul Godfrey reacts to the investigation and fraud charges.
CTV Toronto: Paul Bliss on the reaction
Ont. Premier Dalton McGuinty comments on the political fallout from another scandal in the provincial lottery organization.
CTV News Channel: OLG responds to the $12.5 million lottery fraud
The head of OLG, Paul Godfrey holds a news conference addressing the lottery fraud that took place in 2003 and answers questions from the media. Godfrey says this is a huge concern and the OLG is doing everything in their powers to protect costumers.
CTV News Channel: Commissioner Chris Lewis, head of the OPP
Commissioner Chris Lewis explains when the investigation into the lottery fraud began. Lewis also says there is information that will not be released to the public, which will help identify the rightful owner of the winning lottery ticket.
CTV News Channel: OPP give details on lotto fraud
Commissioner Chris Lewis, head of the Ontario Provincial Police, and inspectors Bill Price and Don Perron speak at a Toronto news conference about the lottery fraud. They give details around the arrest of convenience store owners allegedly involved in the fraud.

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Ontario Provincial Police (OPP) Insp. Bill Price announce the arrest of three people, Kathleen Chung, Jun-Chul Chung and Kenneth Chung, in a case of lottery insider fraud at a press conference in Toronto on Wednesday, September 29, 2010. (Adrien Veczan / THE CANADIAN PRESS) OPP Commissioner Chris Lewis announces the arrest of three people, Kathleen Chung, Jun-Chul Chung and Kenneth Chung, in a case of lottery insider fraud at a press conference in Toronto on Wednesday, Sept. 29, 2010. (Adrien Veczan / THE CANADIAN PRESS) Paul Godfrey, chairman of the board of the Ontario Lottery and Gaming Corporation (OLG), comments the arrest of three individuals by the Ontario Provincial Police (OPP) at a press conference in Toronto on Wednesday, Sept. 29, 2010. (Adrien Veczan / THE CANADIAN PRESS) Chris Lewis, head of the OPP, speaks at a press conference in Toronto on Wednesday, Sept. 29, 2010. Chris Lewis, head of the OPP, speaks at a press conference in Toronto on Wednesday, Sept. 29, 2010.

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Ontario Provincial Police (OPP) Insp. Bill Price announce the arrest of three people, Kathleen Chung, Jun-Chul Chung and Kenneth Chung, in a case of lottery insider fraud at a press conference in Toronto on Wednesday, September 29, 2010. (Adrien Veczan / THE CANADIAN PRESS)

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Date: Wed. Sep. 29 2010 7:21 PM ET

Police are seeking help from the public in finding the rightful owner of a winning $12.5-million ticket, after charges were laid against three relatives who police say wrongfully claimed the winnings seven years ago.

Ontario Provincial Police announced charges Wednesday against a father, son and daughter alleged to have bilked a customer out of the multimillion dollar prize.

Although the rightful owner or owners of the winning 2003 ticket would not have known the numbers -- which were 6, 8, 14, 36, 41 and 42 -- police said it is possible that they can be identified.

"We have a very in-depth customer profile that the OLG has assisted us in terms of developing," said OPP Insp. William Price. "It's very specific what this customer did."

That person bought a ticket at a video store in St. Catharines, Ont., called That's Entertainment. He or she then validated it in Burlington, Ont., where police say it won a free play -- which the customer never received.

That free ticket is what won the $12.5-million prize on Boxing Day of 2003.

"The person who played up to that point is the person we need to find," said OPP Commissioner Chris D. Lewis.

The Ontario Lottery and Gaming Corporation believes the person who bought the ticket was living and working in St. Catharines and Burlington. He or she usually purchased several tickets, leading investigators to believe it was part of a group purchase.

At his own news conference, OLG chairman Paul Godfrey said the Crown corporation's new investigative system -- Data Analysis and Retrieval Technology -- should help the investigation.

"Data research that used to take weeks or months may now take minutes," he said. "That makes DART a powerful tool OLG find, fight and prevent fraud."

Jun-Chul Chung, 60, of Thornhill; Kenneth Chung, 28, also of Thornhill; and Kathleen Chung, 29, of Oakville, are all charged with:

  • fraud over $5,000
  • possession under $5,000
  • possession over $5,000 (proceeds of crime)
  • money laundering

Jun-Chul and Kenneth Chung are also charged with three counts each of theft under $5,000 and two counts each of possession under $5,000.

At a news conference in Toronto, the OPP said charges against the three accused were the result of a lengthy investigation into an offence that allegedly happened in 2003.

According to police, the father and son were both working at a lottery retail location in Burlington, where they are accused of taking lottery tickets from customers.

According to an OPP statement, the two men "provided the winning ticket to a female family member to claim, in an attempt to conceal their association between their criminal activity and the lottery retail location."

The media was never notified about the lottery win, as per OLG policy. Officials are now trying to determine why corporate protocol was not followed.

The OPP said they have executed search warrants and seized $10 million in assets from the three individuals, including five high-end cars, three commercial properties and two homes.

The three accused have been granted bail and are scheduled to appear in a Milton, Ont., courtroom on Oct. 27.

Previous case

Three years ago, the Ontario government asked police to investigate the OLG after its ombudsman accused the lottery-ticket retailers of inappropriately pocketing tens of millions of dollars.

The probe led to the arrest of a Toronto convenience store owner who was sentenced to a year in jail earlier this year. Hafiz Malik pleaded guilty to scamming a customer out of a lottery ticket worth $5.7 million in 2004.

Since the probe, the Crown Corporation has been under fire for questionable insider wins, irregular scratch-lotto payouts and lawsuits from gambling addicts and out of control spending.

Kelly McDougald was fired as CEO last August and the board of governors was replaced.

In 2009, The Canadian Press reported that the rules were being changed, and that Ontario retailers who sell lottery tickets would no longer be able to claim prizes on tickets purchased in their own stores.

The latest instance of alleged wrongdoing prompted Premier Dalton McGuinty to defend the province's lotteries system.

"It's become a very important mechanism for us to bring money into our schools, into our hospitals," he told reporters. "And we want to make sure that when people buy that ticket, that the system is very fair."

OLG makes about $6.5 billion in revenue each year.

With reports from CTV Toronto's John Musselman and Paul Bliss, and files from The Canadian Press

Comments are now closed for this story

Roy Robb
said

In Australia you can buy a lottery ID card that costs $3 per year. Every time you buy a lottery ticket at a retail outlet (or you can even buy tickets online) they record your ID number. If you win, they deposit your winnings directly in to your designated bank account..no fraud is even possible under this system.


Just me
said

I think we pay enough taxes to the government as is. Do you see how much the Lottery company keeps for themselves?Instead of buying lottery tickets, every inteligent being should put the $10 or $20 per week (or even if it's $2.00) into a piggy bank or jar and at the end of a month or two deposit into ING DIRECT SAVINGS ACCOUNT that gives the BEST INTEREST OF 3%. (Check them out on the internet.)After 10 or 20 years you'll see how much that adds up to... I've been with them for many, many years. They are great! Instead of having a building at every street corner that cost $$ to maintain... they give their customers the $$$.BEST SAVINGS AND MORTGAGE ACCOUNTS EVER. For my house mortgage I've been paying 1.6% interest for the past many months. Try to beat that. They even were nice enough to pay the notary fee when I changed from National Bank that did not want to lower the interest rate that we had at 6% even though the interest rates were going down like crazy. Happy saving !!!


William
said

I never buy lottery tickets and I don't need to because all my needs are looked after. Chasing after impossible odds contributing to the tax coffers of this corrupt government are never in my best interests. Lotteries are a way of causing those who chase after them dissatisfied with their place in life. People should learn to be content with where they are and while working to improve circumstances without putting credit in lotteries which are forms of taxation by the government which are supposed to serve the people not rip them off. Glad that the authorities are finally getting around to cleaning up the corruption which existed while under McGuintys watch....cant wait to turf these people out in 2011


Susan Fairbairn
said

Clearly there is something wrong with the way lottery tickets are sold and verified by vendors in Ontario. It seems that when you hear of something like this happening, it is someplace in Ontario. Maybe independent investigators from outside Ontario need to be brought to find out who is allowing this to happen and shake up the OLG.


Ian
said

I find it shocking that a court would only sentence a guy to 1 yr in jail (basically 4 months will be served) for robbing someone of $5.7 million.

Ian
said

What I find odd is that the charges were Theft Under $5000. Isn't 12.5 million over 5000?


Jay
said

Hmm its seems to be a habit in Ontario


blackienme
said

If you play the Lotteries, do you remember your number and whether you played it on December 26, 2003?


Bubba says I won, I won!! A free ticket
said

I won, I won!!! WHat did I win...a free play. Dangit.

I am thinking that I will never buy another ticket from OLG. There's a scandel per month over there, and hey, where does the money go anyway. I figure the Liberals are probably siphoning off most of the money for their own use.


jack1
said

How confirm that ticket was stolen???!!!!!! there was NO name on that ticket right????, no finger print, correct????


pb_toronto
said

@ MarkYou should probably read the article..it waa alleged to have happened in 2003.I am concerned however in teh treatment of these cases. $12 million fraud will amount to no more than a slap ont he wrist, if found guilty at all. They will never have to pay back the funds so the fraudsters still win.I feel that for everyone of these scammers that got caught there are probably 4 - 5 cases that will never be uncovered. I dont play the lottery but scammers are scammers and punnishment should be harsh in my opinion.


Chris
said

OLG knew about this years ago and did nothing !!!
( several cases where profiled on W5 / CTV and other news broadcasts long ago.....)

- they ( OLG ) also know of , and knew of several other cases just like this , but kept their mouths shut and told employees to do the same !!!!

- the OPP themselves began , then abruptly halted several investigations , with no explanation whatsoever !!!!



Mike
said

Lottery tickets are a tax against people who are bad at math


realist
said

Drew from T.O: retailers CAN'T purchase the lottery tickets. That's where the scam comes in. Someone comes in and has their ticket scanned, the retailer sees its a winner but tells the customer its a losing ticket. Then they take the ticket and give it to someone else to cash for them, promising them a cut. That's why you should always sign your tickets immediately and check the numbers yourself. And I agree with the store owner who commented that its unfair that these few bad apples are causing all retailers to be painted with the same negative brush.


John
said

Checking tickets was different back then, they didnt have the checking machines. However, I make sure to check my ticket numbers online and at the machines to make sure..its accurate


B. Kelley, No illusions in Ontario
said

Interesting! The whole lottery business is a scam dreamed up by government to exploit the greed and stupidity of the public. Just watch the OLG commercials with a critical eye and it's not difficult to see their strategy based on P.T. Barnum's philosophy of a sucker born every minute.

Erik
said

@ Mark You realize this took place in 2003 right?


Craig, Markham
said

Drew - the retailers are citizens of our country and should be able to pay this voluntary tax the same we do! Maybe OLG needs some analytics to determine if a ticket is checked at multiple locations, which might be an unusual pattern.Mark - the ticket scam this article discusses are events which happened in 2003, before any of the recent changes to the ticket control. It is a bit unreasonable to be suggest the "the same old same (sic) old is at work". Pam - agreed! Check your own tickets. Know what you should get before going to the counter. I believe the self checker indicates when it is a "large prize" (but not amount) which should be enough to tell a player they need to visit the lottery head office and not do anything more with the retailer.


Donaldbain
said

Is anyone surprised by this? It has been going on since Lotto started.


Bob,Calgary,Alberta
said

It is interesting that the OLG is only now adopting data analysis tools to analyze the vast amounts of mineable data they must accumulate on their ticket sales and prize awards. I used to run an internal audit department in one of Canada's largest companies and we were using data analysis tools to search for fraud etc. over 15 years ago. Seems to me that ,while this is a good result in discovering the fraud,it does point out how slow civil servants are in adopting technology to solve problems.I am still a firm believer that we should always severely limit the number of services governments provide because history says that they just don't do it well.


Ron F Markham
said

Nothing has changed.How would the new foolproof safeguards help prevent a recoccurence of this same "scamario" ? ."In 2009, The Canadian Press reported that the rules were being changed, and that Ontario retailers who sell lottery tickets would no longer be able to claim prizes on tickets purchased in their own stores. " The winning ticket was not cashed by the retailer.The only mistake they made was handing it to family member with the same name."Since the probe, the Crown Corporation has been under fire for questionable insider wins, irregular scratch-lotto payouts and lawsuits from gambling addicts and out of control spending. " This annoucement was at the airport Holiday Inn while the taxpayers pay for a fancy office downtown that accomodates all the press weekly for every big win. So what's included in this bill overnight hotel stays to prepare for the press conference,limos there,breakfast and lunch for all the staff on hand ?Same old,same old !!


Chuck Ryer
said

Well... I think every Joe and Jane Blow will be calling in. "I bought a ticket" How on earth are they going to prove who this ticket truly belongs to? Besides even if they do find the owner, it isn't like the OLG is going to pay them anything even remotely close to their winnings. I imagine they will try to get the money from the store owners... People are not very smart! If you scam someone out of a 12.5 million dollar prize, get the hell out of the country and never ever look back!


Anne
said

It's a no brainer. Check your own lottery numbers. I see people hand over multiple tickets to be scanned, opening the door for fraud should the person behind the counter not be honest. Do it yourself, and you'll know if you are indeed a winner.


Mark
said

Ah yes, here we go again with yet another glaring example of the incompetence of the McGuinty government to police this cash cow. Blatant fraud has been performed in the past, firing of the CEO and a new board, tons of advertisements of how we can now really trust the OLG.Now we see that the same old same old is at work. Yes, this is the work of a very few criminal fraud artists-but let us not forget they work within the system: a system that has clearly had nothing more than a whitewash.Accountability, responsibility and honesty-maybe the OLG and McGuinty Liberals could look up the definition of these words and give some thought to EVER trying to apply them.


Preston Venasse
said

I am very happy to know someone is watching out for the "general public". What I would like to know is, what if the retailers that know each other or start getting together and work with one another to start helping each other win. Maybe using third or forth... parties with different last names. Now that would be quite a scam, would it not. LOL


Drew From T.O
said

Simple solution here is: Anyone who works in a place that sells or distributes these tickets should not be able to play. Done no more fraud!


Kim (Hastey Market in Niagara, ON)
said

I own a variety store with lottery. Many people now look at us as crooks because of a few bad apples. It is sad.


Evan in Athabasca
said

Oh, That was my winning ticket....


Pierre from Orleans
said

To ensure that I am not being ripped off by dishonest retail lottery vendors, I never ever have them check my tickets. Instead, I personally use the scanning device which will tell you if your ticket is or is not a winner. If a scanning device is unavailable, I go to another location which does have a scanning device.

Also, I always sign tickets immediately after purchase.


Pam
said

There checking machine for purchasers to check their own tickets should be located in a totally different area away from the cash desk. If the prize is over $-------- a retailer may pay out then a paper should be produced from the machine with the winning number and advising the person to "Go Home and read this message to apply for your winnings" as it is over $------. All tickets MUST BE RETURNED to the purchaser whether it is a loser or a winner IF the retailer is asked to assist. This is not an Einstein problem requiring mathmatical formulas to resolve the problems of fraud at OLG.


Mildred McCulloch
said

Don't buy tickets then there will be no scams.The odds are like getting struck with lightning.

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