By Chris Hansen Correspondent
NBC News

Explainer: How lucky can you get?

  • Read the transcript to the Dateline report, which airs Monday, Sept. 6, 10pm/9C. Click on 'next' to see each part of the episode.

  • Part 1

    It's the dream of striking it rich that makes lottery big business in this country.

    UNIDENTIFIED MALE:  Hey, you never know.

    UNIDENTIFIED FEMALE:  Travel, buy a house, pay off debt…

    UNIDENTIFIED MALE:  I haven't won yet, but I still have faith.

    42 states, the District of Columbia and even Puerto Rico run lotteries that rack up sales of $60 billion every year.

    UNIDENTIFIED MALE:  Tour the world.  That's my dream.

    UNIDENTIFIED MALE:  I’m gonna take care of my parents, think I’m gonna buy 'em a house. Definitelytake the family on a good vacation. And then I’m gonna buy where I work.

    And, because the odds of winning big are miniscule, more than $17 billion ends up in state treasuries every year.

    Still.... you probably think that if you're lucky enough to buy a winning ticket, you'll end up with the cash. But, as we showed you last year, that's not always true.

    This woman handed a clerk some lottery tickets.

    UNIDENTIFIED WOMAN: I don't think these are winners, but if you could check them for me, please. Thanks.

    It turns out one of them was a $1000 winner. But did the clerk tell her the truth? She went off to shop in the store...The clerk carefully examined the tickets...The woman is really a California lottery investigator. When she came back to the counter... 

    WOMAN: None of them are winners? All right, have a good day. 

    The clerk told her all of her tickets were losers – and kept that $1000 winner for himself. We saw it again and again. Our report raised alarms in the lottery industry. We followed undercover California lottery investigators as they tested the honesty of clerks, like that guy who took the $1000 ticket for himself.

    CHRIS HANSEN: Now, you see the reason why I know you're lying is because we can tell that you scanned that ticket.

    And there was this clerk at a liquor store.

    CHRIS HANSEN:You told the woman that she was not a winner. But that ticket was $1,000 winner.

    And this woman, who stole a $1000 ticket and gave it to her daughter to cash.

    CHRIS HANSEN: What did you tell your daughter about the ticket?

    WOMAN: I said some customer left it.

    We watched as those lottery clerks were taken off to jail.

    You may be thinking stealing winning lotto tickets isn't all that serious a crime – Bob Sehested might not agree. A few years ago, he didn't realize he was holding a $530,000 winning ticket. He relied on a California clerk to check if he was a winner. That's when he was told.....

    BOB SEHESTED: You won $4.

    The clerk kept the winning ticket for himself and handed Bob a smaller winner…the old switcheroo. The clerk was arrested and sent to prison.  And Sehested learned a lesson.

    BOB SEHESTED: I didn't pay attention.  I trusted him.

    Our report was a wake-up call for the lottery industry around the country... some officials told us they would intensify efforts to make sure their clerks were honest. But it's still happening.  

    Meet Willis Willis, of Grand Prairie, Texas. He plays the lottery at the same store every week. One day, last spring, he handed his tickets to the clerk behind the counter.

    WILLIS WILLIS: And asked the guy to check my tickets if they're winners or not.

    The clerk, was a 25-year- old college student by the name of Pankaj Joshi.

    WILLIS WILLIS: And he came back and he said, ‘Well, you have a two-dollar winner.’

    But, it turns out, Willis had won just a little more than two bucks – he'd really won a million! 

    His ticket, according to the local D.A., was stolen by the clerk. She presented the case to a Grand Jury.

    D.A. ROBERTSON: And they made a determination that Pankaj Joshi committed this offense of claiming a lottery prize by fraud.

    It's hard to know exactly how often this happens. What we do know is that all over the country, lottery retailers are turning up as some of the biggest winners around.

    In New York, a lottery retailer has cashed 120 winning tickets for more than $500,000.

    And in Florida, there are seven lottery retailers among the frequent winners—including one store owner in Bonita Springs who has cashed 120 winning tickets worth $600,000 dollars.

    What's going on?

    Bill Hertoghe spent four years as the chief investigator for the California lottery. He says if a person who sells lottery tickets is winning big, there are just a few explanations.

    BILL HERTOGHE: Plays a lot, wins a lot, or somehow scammed it.  And until we analyze it...until you confront it, I don't know.

    CHRIS HANSEN:  YOU DON'T KNOW.

    We followed Hertoghe and his team last year as they conducted undercover operations to ferret out dishonest lottery clerks.

    BILL HERTOGHE: We want to send the message to those that think they will prey—that we're out there investigating. We're keeping track of what they're doing.  And we seek to get them.

    Now he's invited us back, as he and his team continue to make sure lottery clerks are giving the rightful winners the good news. And when they don't, we'll be giving them the bad news.

    CHRIS HANSEN: Chris Hansen with Dateline NBC.  How you doin'?

    NICK GARCIA: My goodness.  Are you serious?

  • Part 2

    A woman is about to hand this clerk some lottery tickets, and she knows one of them is a one-thousand dollar winner.

    WOMAN:  I don't think these are winners, but if you could check them for me, please…

    She pretends she doesn't know how to play the lottery. When she comes back the counter, will the clerk tell her the ticket is a winner?

    WOMAN: Did any of them win anything?

    CLERK: No.

    WOMAN: No?

    CLERK:  Mm-mm [negative]

    WOMAN: Alright. Have a good day.

    CLERK: You do the same.

    WOMAN: Thank you.

    The woman is really an investigator for the California lottery. She's part of a sting operation that's just another day's work for the Lottery's chief investigator Bill Hertoghe and his team. We're back on the road with them as they go after dishonest lottery retailers.  

    Here's how the sting works:  A lottery investigator, posing as a customer, will try to redeem a winning ticket. No matter what the state, there are basically two types of games. First there are the online games, like Lotto, Powerball or Mega Millions – called “online” because it's run via the lottery's computer. But, for this investigation, the California lottery will be using so-called “scratch-off” tickets.

    The undercover investigator wears a hidden camera to record video for evidence as he walks into this store in Palm Desert.

    He asks the clerk to check his tickets—just like thousands of lottery players do every day.

    INVESTIGATOR: Would you mind checkin' these for me?

    CLERK:  Not at all.

    INVESTIGATOR:  They were a birthday present.

    CLERK:  Happy to do it.

    INVESTIGATOR:  I'm gonna get a bottle of water too. I'll be right back up.

    Remember, one of those tickets is a winner specially made for this investigation. When a clerk scans a ticket, it shows up as a winner or loser immediately. The clerk even gets a hard copy so there's no doubt. In this case, the retailer does the right thing and tells the undercover investigator he's a big winner!

    CLERK: You won 25 grand.

    INVESTIGATOR:  You're—shhhh! I mean, you're kidding me.

    CLERK:  No, I'm not. I can't do anything for you here.

    INVESTIGATOR:  You just did!

    The clerk goes on to explain how to properly claim the ticket by filling out a claim form and mailing it to Lottery Headquarters.

    In fact, most of the time, clerks do it all by the book—but not always.

    Watch what happens when a female investigator brings a $1000 winning ticket to this clerk at a bowling alley in San Jose.

    INVESTIGATOR: None of 'em are winners?

    CLERK: No.

    INVESTIGATOR: No?

    CLERK: Next time, if you could scratch the numbers off...

    INVESTIGATOR: I hardly ever play, so...

    CLERK: Oh, you don't.

    INVESTIGATOR: Well, you have a good day.

    CLERK:  You have a good one.

    He seems to imply she didn't scratch off her numbers correctly. Bill Hertoghe is outside monitoring his investigator.

    BILL HERTOGHE: So that will be a rip...  

    A rip, or rip-off – a potential stolen ticket by a lottery clerk.

    It's a similar story at this market in San Jose. The investigator brings in another $1000 winner for the clerk to check.

    INVESTIGATOR:  Would you mind checking these for me? I don't think they're winners, but if you could check 'em.

    CHRIS HANSEN: It sounds like she's got the tickets on the counter already. 

    BILL HERTOGHE: She's—distracted.

    CHRIS HANSEN: Right.

    But does the clerk tell her she's a winner?

    INVESTIGATOR: None of 'em are winners?

    CLERK: No.

    INVESTIGATOR: Boy, I am sure not lucky.

    CLERK: Ah, yeah.

    INVESTIGATOR: Thank you very much. Have a good day.

    CHRIS HANSEN: So it was a rip. 

    BILL HERTOGHE: It was a rip.

    And at this market...

    CLERK: Nope.

    INVESTIGATOR: None of 'em are winners?

    CLERK: No.

    INVESTIGATOR: Boy, does anyone ever win on those things?  I've never won.

    CLERK: Yeah.

    INVESTIGATOR: Alright, thank you very much.

    CLERK: Alright.

    Now the team moves to the desert of Riverside County—and ups the ante. At this smoke shop in Cathedral City, the investigator has just handed the clerk a ticket that will scan as a $25,000 winner.

    The clerk scans the ticket, tells the investigator it isn't a winner and appears to throw it away.  $25,000 in the garbage.

    This liquor store in the town of Indio has its own surveillance cameras. The clerk wearing the striped shirt does tell the undercover investigator that one of his tickets is a winner…to the tune of $100.

    CLERK:  $100, you win.

    INVESTIGATOR:   I'm sorry, what?

    CLERK:  $100.

    INVESTIGATOR:  $100?

    CLERK:  $100, you win.

    INVESTIGATOR:  Wow! Not bad for a birthday present, huh?

    Just one problem: That ticket was actually a $10,000 winner. The clerk just shaved off nine-thousand, nine-hundred dollars. 

    CLERK: Now I give you $100.

    He's happy to pay out a hundred bucks.

    INVESTIGATOR: I may have to start playin' this game.

    Maybe the clerk just misread the ticket… But watch what happens after the undercover investigator leaves. He studies the ticket carefully and even shows it to his co-worker. And they seem excited. He kisses the ticket.

    It's time to find out if this clerk and all those other clerks really have reason to celebrate. Lottery investigators now must simply wait...wait to see if the tickets are actually cashed in and, if so, who does the cashing.

    CHRIS HANSEN:  You saw that it was a $1,000 winner. Yet, you told the woman it wasn't.

  • Part 3

    We're back on the road with California lottery investigators, and we're about to confront some of the clerks who were caught on the Lottery's hidden cameras allegedly stealing winning tickets.

    Our first stop is that bowling alley in San Jose where three months earlier an undercover investigator presented what should have been a winning ticket. But that's not what the clerk told her.

    One of the employees at the bowling alley, Nick Garcia, told the investigator none of them were winners, when in fact one of those was a $1000 decoy winner.

    INVESTIGATOR: None of 'em are winners?

    CLERK: No.

    INVESTIGATOR: No?

    CLERK: Next time, if you could scratch the numbers off...

    INVESTIGATOR: I hardly ever play so...

    CLERK: Oh, you don't.

    INVESTIGATOR: Well, you have a good day.

    CLERK:  You have a good one.

    But, just two days later, it was a woman named Monique Lyzette Duran who mailed in a claim for the $1000. She later told the lottery she found the ticket on the ground outside the bowling alley. Investigators have already confronted the lottery clerk, Nick Garcia, when we arrive.

    CHRIS HANSEN: Chris Hansen with Dateline NBC. How you doin'?

    NICK GARCIA: My goodness.  Are you serious?

    Garcia appears taken aback—

    NICK GARCIA: I—I just—I love your show—

    CHRIS HANSEN: Well, thank you, very much.

    NICK GARCIA: Like I said, I—I—I’m a fan.

    CHRIS HANSEN: I APPRECIATE THAT.

    Garcia admits he stole the ticket, but says he has never done this before.

    NICK GARCIA:  I already confessed to everything. Like, there is nothing you can show me. I know.

    CHRIS HANSEN: [showing tape] She comes in...

    NICK GARCIA:  Yeah. No, I know, I know.  I've seen this already.

    CHRIS HANSEN:  Did you know it was a winner?

    NICK GARCIA: No.

    But remember, it wasn't Nick who tried to cash  the ticket—it was that woman named Monique.

    CHRIS HANSEN: Now, who is Monique Lyzette Duran?

    NICK GARCIA: I—that's—that's my girlfriend.

    Later, Garcia pleads no contest to three felonies: Attempted grand theft, receiving stolen property and perjury. He is sentenced to 45 days in jail, three years’ probation and fines.

    In consideration for Garcia pleading to all the charges against him, the case against his girlfriend is dismissed.

    CHRIS HANSEN: Our next stop is Mercado y Carnesaria Moreno, which is in San José, California.

    Three months before, Miguel Teran was behind the counter.

    INVESTIGATOR: None of 'em are winners?

    CLERK: No.

    INVESTIGATOR: Boy, I am sure not lucky.

    CLERK: Ah, yeah.

    INVESTIGATOR: Thank you very much.  Have a good day.

    Teran told an undercover investigator all her tickets were losers. But the very next day, Teran's daughter-in-law mailed in a claim for the $1000 ticket. We want to ask Teran some questions.

    CHRIS HANSEN: Can you tell us what's going on here? What happened? It appears as though a $1,000 winning ticket was brought in here. 

    Teran tells me he really did think the $1,000 ticket was a loser and threw it away.

    MIGUEL TERAN: I put it in the garbage.

    CHRIS HANSEN: You put it in the garbage.

    MIGUEL TERAN: Yes, sir. 

    He tells me his son found the ticket in the garbage, realized it was a winner—and then gave it to his wife to cash.

    What Teran didn't realize: His son has already told investigators that he didn't find the ticket in the garbage, but sitting on a gumball machine outside the store. Of course, neither story is true.

    I show Teran the videotape of the undercover investigator's visit.

    CHRIS HANSEN: This is your store. And that's you.

    According to lottery records, that $1000 ticket  was scanned only once—when the undercover investigator asked him to check it.

    CHRIS HANSEN: The lottery knows that you scanned those tickets and one of them came up a $1,000 winner. They know that because it registers on their computer system. They know that you looked at it. You saw that it was a $1000 winner. Yet, you told the woman it wasn't. That's a lie, correct.

    MIGUEL TERAN: Uh-huh [affirmative].

    CHRIS HANSEN: So, you tried to steal that ticket, right?  Why would you do that?

    MIGEUL TERAN: I honestly—I told you. I needed the money.

    CHRIS HANSEN: You needed the money?

    OWNER: Yes, sir.

    Lottery officials immediately terminate their contract.  They will no longer be able to sell lottery tickets.  Retailers get to keep about five percent of all ticket sales, and that money can be the lifeblood of a small business like this one.

    Teran and his son are arrested.

    Both men later plead guilty to a felony—attempted Grand Theft—and both are sentenced to 45 days in jail. And there's one more thing: Teran and his son are  in the country illegally, so they may be facing  deportation

    Remember this lottery clerk, who kept that $1000 ticket submitted by an investigator?

    In this case, Joe Chung, who is behind the counter, kept the ticket. And it ultimately was submitted to be claimed by his wife.

    Chung has already told investigators his wife lied and said it was her winning ticket to try to protect him.

    At first, Chung says he has no comment.  Then I show him the tape of him stealing the ticket from the undercover investigator.

    CHRIS HANSEN: A woman comes in.  That's you, right?

    INVESTIGATOR: I don't think these are winners.  But you can check…Did any of them win anything?

    CLERK: No.

    INVESTIGATOR: No?

    CLERK:  Mm-mm [negative]

    INVESTIGATOR:  Alright.  Have a good day.

    CLERK: You do the same.

    INVESTIGATOR:  Thank you.

    Is there anything you want people to know about what we saw on this videotape?  Or what you did with that ticket?

    JOE CHUNG: Dumb.

    CHRIS HANSEN: I’m sorry?

    JOE CHUNG: I’m so dumb.

    CHRIS HANSEN: So dumb. Was it worth $1000?

    JOE CHUNG: She didn't know about it.

    Chung tells me his wife didn't know anything about the ticket. He says he faked her signature on the lottery claim form and mailed the ticket in himself.

    The Chungs'  contract to sell lottery tickets is terminated on the spot.

    Joe Chung and his wife are arrested, and later, he pleaded guilty to three felony counts: Attempted grand theft, possession of stolen property and perjury. He was sentenced to 45 days in jail, three years’ probation and fines.

    In consideration of her husband's plea to all counts, charges against Mrs. Chung were dropped.

    Our next stop is guru's food and liquor in San Jose, California. We show the videotape of the investigator's hidden camera to the clerk who took the $1000 ticket, Jogander Chahal.

    INVESTIGATOR: None of 'em are winners?

    CLERK: No.

    INVESTIGATOR: Boy, does anyone ever win on those things?  I've never won.

    CLERK: Yeah.

    INVESTIGATOR: Alright, thank you very much.

    CLERK: Alright.

    INVESTIGATOR:  Bye-bye.

    CHRIS HANSEN: Okay, so you told her that none of them were winners.

    JOGANDER CHAHAL: Yeah.

    CHRIS HANSEN: But one was a winner.

    JOGANDER CHAHAL: No, after that, I will see it's winner.

    He says at first he didn't realize the ticket was a winner, and, by the time he did, the woman had left the store.

    JOGANDER CHAHAL: So, I don't want to stole anything. I would call right away the, right away the owner. I tell them everything.

    CHRIS HANSEN: The owner? 

    He says he gave the ticket to the owner of the store, and told him about his mistake. And it was that owner, Harduman Sanghera who actually tried to cash the ticket.

    CHRIS HANSEN: You end up with a ticket, and you try to claim it.

    HARDUMAN SANGHERA: I did. That's—I did.

    CHRIS HANSEN: You see how that looks.

    HARDUMAN SANGHERA: Bad.

    CHRIS HANSEN: Yeah.

    HARDUMAN SANGHERA: Very bad.  Bad-looking on me.

    And it could get very bad for Sanghera. He owns seven stores that sell lottery tickets, and he could lose all of those lottery contracts if he's found guilty. He's been a lottery retailer for fifteen years, but he tells me this is the first time he has ever claimed a winning lottery ticket.

    CHRIS HANSEN: You've never claimed a winner.

    HARDUMAN SANGHERA: Not any myself.

    CHRIS HANSEN: Then why did you claim this one?

    HARDUMAN SANGHERA: Well, God—God, you know, sometimes—

    CHRIS HANSEN: No, no, no, no.  We're not talking about God and that… No, you claimed the ticket.

    HARDUMAN SANGHERA: Yeah, I did.

    CHRIS HANSEN: You know how the system works.

    HARDUMAN SANGHERA: Yeah, I did, sir.  I did.

    Later, Sanghera and his clerk plead guilty, the clerk to possession of stolen property and Sanghara to misdemeanor grand theft.  Both are sentenced to one year of probation and fined. And Sanghara won't be selling any more lottery tickets. The contracts at all of his stores have been terminated.

    Lottery investigators continue making the rounds at locations where winning tickets were submitted. Remember that $25,000 scratch off that was thrown in the trash?  Did that winning ticket ever make it into someone's pocket?  We're about to find out.

  • Part 4

    Now California lottery investigators are back in the desert of Eastern Riverside County. Three months before, they had used some big winning tickets to test their retailers.

    We're heading to a place called Smoke & Beyond which is in Cathedral City, California. California lottery investigators presented a decoy ticket that showed up as a $25,000 winner. The owner of the store, Mike Ghazawi, threw that $25,000 ticket in the trash.

    But, miraculously, the ticket was rescued from the garbage heap and the lottery received a claim for the ticket—mailed in by Mike Ghazawi's friend.  I wanted ask Mike how that could have happened.

    CHRIS HANSEN: Hey, mike?  Chris Hansen with Dateline NBC.  How are you today?  Good to see you.  We're doing a story on lottery retailers who have accepted and scanned winning tickets, but told people they were losers.

    MIKE GHAZAWI: I can't talk to you.

    CHRIS HANSEN: Can I just show you something on tape, though?

    MIKE GHAZAWI: NO.

    CHRIS HANSEN: Mike, I think you're gonna want to see this.

    MIKE GHAZAWI:No.

    Ghazawi gets his lawyer on the phone, and our interview is over.

    MIKE GHAZAWI: Please leave.

    CHRIS HANSEN: So you don't want to see this video?

    MIKE GHAZAWI: No.  I don't want to see nothing.

    CHRIS HANSEN: The video where you accepted—

    MIKE GHAZAWI: I don't want to see nothing, please.

    CHRIS HANSEN: — a $25,000 winner and you tell a man that it's not a winner?

    MIKE GHAZAWI: I don't want to hear nothing, okay?  I don't want to hear nothing. Will you—

    CHRIS HANSEN: Fine.

    MIKE GHAZAWI: —please leave.

    CHRIS HANSEN: I just want to give you a chance.

    MIKE GHAZAWI: Okay.

    CHRIS HANSEN: Thank you very much.

    The lottery investigators move in and question Ghazawi.

    Later, Chief Investigator Bill Hertoghe fills us in on their conversation.

    BILL HERTOGHE: After a little bit, he finally said, you know, ‘I'm a good person, I’m a family man, I want to take responsibility.’ And he said, ‘I stole the ticket.’

    CHRIS HANSEN: He stole the ticket.

    BILL HERTOGHE: He stole the ticket.

    Hertoghe says Ghazawi told him he held on to the ticket for ten days, then gave it to a friend to cash for him. Because Ghazawi is the owner of the store, the lottery confiscates all its equipment and tickets and immediately terminates his contract.

    Later, Ghazawi pleaded guilty to a felony, attempted grand theft, and was sentenced to 90 days in jail, probation and fines.

    The next stop is Sherman’s liquor store in Indio, California. Investigators went in with a $10,000 winning ticket, and the clerk said, "Oh, you won!" He counted out $100 and stole the $10,000 ticket. The interesting thing about this particular incident is that's all very well recorded on the store's own security cameras.

    CHRIS HANSEN: Hey, how are you?

    WAEL KARDOH: Hi.  How are you doing?

    CHRIS HANSEN: Good. Mr. Kardoh?

    WAEL KARDOH: Yes?

    CHRIS HANSEN: Kardoh?  Chris Hansen with Dateline NBC. How are you? There was an incident where a guy came in and gave you a $10,000 winning ticket, and you only gave him $100. Can you tell me what happened there?

    WAEL KARDOH: Well, I have no idea about anything what's going on here.

    Mr. Kardoh seems a bit confused, so I show him the tape of the undercover investigator's visit three months earlier. He sees himself checking the three tickets and paying out $100 on a ticket that was really worth $10,000.

    WAEL KARDOH: All right.

    CHRIS HANSEN: All right.

    WAEL KARDOH: What you want to know?

    CHRIS HANSEN: I want to know why—

    WAEL KARDOH: [unintelligible]

    CHRIS HANSEN: —why you stole the ticket.

    WAEL KARDOH: No. I not mean to steal the ticket.

    CHRIS HANSEN: You did not mean to steal the ticket?

    But remember the store surveillance tape and what happened after the lottery investigator left the store? How he showed the ticket to his colleague? How happy he seemed at his good fortune? How he kissed his new found windfall?

    CHRIS HANSEN: You look all excited there, like you just figured out a way to win—

    WAEL KARDOH: I excited because—

    CHRIS HANSEN: —$10,000.

    WAEL KARDOH: Yeah, yeah.

    CHRIS HANSEN: Yeah.

    WAEL KARDOH: Exactly, yes.

    He says it was all a big misunderstanding—that he really did get confused and mistake the ticket for one worth only $100.  But if that's true – why would his colleague be handing him a lottery claim form?

    WAEL KARDOH: He say, "Okay. Says here you won $10,000.  And you have to fill a form for that."  That's what's happening.

    Kardoh claims he waited two days to see if the person who owned the ticket would come back, then figured "finders-keepers." 

    WAEL KARDOH: Because we human being, you know. When I meet—when I see this, it's—it's really $10,000. And nobody ask for two days about the ticket, I think, ‘Okay, why not keep the ticket for myself?’  This is exactly what—

    CHRIS HANSEN: You thought why not keep the ticket for yourself?

    And that's when he says he gave the ticket to a co-worker to cash for him, because he didn't have a valid ID card at the time. Kardoh says he told his co-worker he had bought the ticket himself.

    CHRIS HANSEN: You lied to him?

    WAEL KARDOH: Yes.

    CHRIS HANSEN: You had plenty of opportunity to call the lottery people and say, ‘Hey, look. There was a mistake made.’ But there was no mistake made. You stole the ticket.

    WAEL KARDOH: No. I not steal ticket.

    CHRIS HANSEN: WELL—

    WAEL KARDOH: All right?

    CHRIS HANSEN: How can you say that?

    WAEL KARDOH: I don't know.

    CHRIS HANSEN: Was it yours?  Did you buy it?

    WAEL KARDOH: Hmm?  No.

    CHRIS HANSEN: Was it yours?

    WAEL KARDOH: I not buy it.

    CHRIS HANSEN: You didn't buy it?

    WAEL KARDOH: No, I not buy.

    Now he finally admits he did something wrong.

    CHRIS HANSEN: What do you think should happen to you—

    WAEL KARDOH: Big mistake.

    CHRIS HANSEN: —because of the mistake?

    WAEL KARDOH: I don't know.  I don't know.  I—I know I—maybe something happen to me.  And I’m ready for anything.

    Kardoh was arrested and held in jail until his trial in February. He was found guilty of felonies –attempted grand theft and perjury. He remains in jail, and could be deported.

    Our experience with California lottery investigators was making a sharp point. If you are dishonest, the state's investigators will find you.

    Bill Hertoghe retired last summer, but the California lottery investigators are still at it. To date, they've checked more than 600 stores, and found that clerks mishandled the winning ticket more than 70 times. 

    But a funny thing happened clear across the country.

    We told the lottery here in New York that we were interested in seeing whether any of its clerks are ever dishonest. The New York lottery told us it doesn't conduct stings like California…But wait until you see what happened when we tried to conduct our own test of New York lottery clerks.

    Warning: NBC News is trying to trick lottery retailers.

    CHRIS HANSEN:  Huh? We're doing what?  

  • Part 5

    While California was more than willing to show us how it tests its lottery retailers to make sure they're honest, across the country, in New York,  lottery officials were not willing to tell us what they do to make sure winners always get their cash.

    So we thought we'd try to find out on our own what would happen if a winning lottery ticket was presented to a retailer in New York, just like the California lottery investigators did. Would the clerks always be honest and tell us we won? 

    But the New York Lottery got wind of it—and something interesting happened. They sent out this alert to every lottery vendor in the New York City area. It said, “Warning: NBC NEWS IS TRYING TO TRICK LOTTERY RETAILERS INTO STEALING WINNING TICKETS.”

    We thought that was odd, so we decided to press on.

    New York’s lottery is the biggest in the country, selling some $7 billion worth of tickets every year. So we're heading out into the streets of the city with some winning tickets and our hidden cameras to see what will happen.

    Our first stop is in Brooklyn. We send in an undercover player—in this case a Dateline producer—with a lottery ticket that we know is a $500 dollar winner.

    PRODUCER:  Can you check these lotto tickets for me?

    CLERK: OK.

    PRODUCER:  I don't know if any of these are winners, but if you can take a look…You know, I'm going to grab some chips too.

    She goes off to shop in the store. Outside, we're listening in on a cell phone. The clerk prints out the winning numbers to compare to the ticket.

    CLERK:  Oh damn. S---.

    PRODUCER: What?

    CLERK:  You hit $500.

    This clerk does the right thing. He tells our undercover player she's a winner.  But because the ticket is more than 45 days old she needs to mail in her claim.

    CLERK:  They gonna give you $500. Good luck.

    He also correctly identifies a $5 winning ticket she gave him. He's honest, as are most of the clerks we visit in New York City.

    PRODUCER:  But I won $500?

    CLERK: You win $500. 5-6-1.

    PRODUCER: Wow.

    These guys do the right thing.

    CLERK: You got right here—like $500.

    PRODUCER: Oh really?

    But like we saw in California, here in New York, that isn't always the case.

    PRODUCER: Any luck?

    CLERK: No. Nothing.

    PRODUCER: No?

    This clerk says the tickets are not winners, but he gives them back to our player.

    The same thing happens at this store...

    CLERK: No.

    PRODUCER:  No?  No luck?

    ...and this one.

    CLERK: This nothing.

    PRODUCER: Nothing. Nothing, huh?

    Are they mistaken, or just too lazy to properly check the numbers on an older ticket?

    At this store in Queens, the clerk also says our $500 winner is a loser.

    PRODUCER:  What about those pink ones?

    CLERK: No, nothing.

    PRODUCER: Nothing?

    CLERK: All empty.

    PRODUCER: All empty.

    CLERK:  I checked.

    PRODUCER:  Even that old one?

    CLERK: Yeah. No. Old one nothing.

    But unlike the others, he keeps the ticket and says he's putting it in the garbage.

    PRODUCER: Oh, you're throwing them out?

    We think the clerk might have stolen our ticket.  As I talk to him... it turns out he did throw our ticket in the trash.

    CLERK: If it's not showing anything, then i put in the garbage.

    CHRIS HANSEN: You put it in the garbage.

    And he says he never really checked our ticket, and never printed out the winning numbers.

    CLERK: I didn't check 100 percent. I didn't check 100 percent, that is my mistake.

    In at least eight cases, our undercover producer went into the store, with the winning $500 ticket, only to have the clerk say it wasn't a winner. But it wasn't in an effort to steal the ticket—it was because the clerk improperly checked the numbers, or just didn't want to bother doing it. So that means that if you had that $500 winning ticket and you went into one of those stores, you lose.

    At this store in Queens, everything seems to going well....

    PRODUCER: I won?  How much did I win?

    CLERK: You got $500.

    They correctly tell her she has to take the ticket to a lottery office in Manhattan to get her money. But then, out of the blue, the clerk warns our shopper that, if she happens to owe money to the government, collecting her winnings may not be so easy.

    CLERK: Listen to me. If you take anything from the government, you can't go to Manhattan. They gonna take the money.

    PRODUCER: Really?

    CLERK: Yeah, they take the money.

    For instance—what if she hadn't paid some parking tickets?

    PRODUCER:  If I have parking tickets, will the government take that out?

    CLERK: Yeah. They take the money. They take the money.

    PRODUCER:  I may have some parking tickets.

    Then the clerk makes an interesting offer. He'll go to the lottery office and cash the ticket for her.

    PRODUCER: You'll get the money?

    CLERK: I'll get the money, cause they ain't gonna take it from me, cause I'm clean.

    "Clean"... meaning that he doesn't owe the government any money, so he would be able to get all her winnings.

    Of course, this "service" isn't free—and this isn't the first time he's made such an arrangement.

    CLERK:  You give me whatever you want. I do the same for somebody else, when somebody else win $2,000. The guy gave me $200. I wouldn't told you to give me $200. You know what I mean? You gonna give me whatever you want.

    What he's doing is known in the lottery business as discounting, and it could be illegal. That's because most people who sell their tickets at a discount are usually trying to avoid paying money that they owe to the state. In New York, the lottery wouldn't really take money from winnings for outstanding parking tickets—but it could deduct money if the winner owed child support, or even if they'd been collecting welfare, and, of course, there could be deductions for taxes.

    Now it's time to talk to the clerk.

    CHRIS HANSEN: Tell me what happened.

    PRODUCER: You have my ticket?

    CLERK: Yeah, I’ve got your ticket over here [pulling out ticket from his wallet].

    CHRIS HANSEN: So what were you gonna do with that ticket, Oscar?

    CLERK: No, she said she can't go.

    CHRIS HANSEN: She can't go.

    CLERK:  That's what she said. I said, ‘I’ll do the favor to you.’

    CHRIS HANSEN: But it sounds like you were being very careful because you're very familiar with the rules and the laws.

    CLERK: I don't talk to her like that, I don't talk to her. Definitely...

    CHRIS HANSEN: Well I heard the whole conversation.

    CLERK: Well...

    But the clerk keeps saying he didn't know he might be breaking the law.

    CLERK: I’m so sorry [hands in praying position]. I'm so sorry I don't know about it.

    We take our ticket, and get back on the road. So far, no one has actually stolen our ticket. But will that last?

    And New York's lottery chief isn't happy when we tell him about our investigation.

    CHRIS HANSEN: Can I show you a video?

    GORDON MEDENICA: No.

  • Part 6

    We're still out on the streets of New York City, checking the honesty of lottery clerks. This $500 winning lottery ticket has covered a lot of ground; as you can see, it's a little worse for the wear. It's got some tears, corners missing. We had to patch it up with some scotch tape.  But we've learned a lot from it.

    Now our undercover player is taking our ticket—along with another small winning ticket—into this smoke shop in Greenwich Village.  The clerk seems friendly and willing to help.

    PRODUCER: Hello. Can you check some lotto tickets for me?

    CLERK: Uh-huh.

    The clerk identifies our smaller winner, and pays our undercover player.

    PRODUCER: Thank you.

    CLERK:  You're welcome.

    Then the clerk checks the winning numbers against what we know is a $500 ticket. And, boy, does he get excited when he spots the numbers.

    CLERK: Whoa.

    PRODUCER: What?

    CLERK: Whoa!

    PRODUCER: What?

    But hold on—wait a minute—he seems to calm himself down. 

    CLERK: 1-7-3. Nothing. You just miss.

    PRODUCER:  Oh. I missed it?

    CLERK: Yeah. Yeah.

    PRODUCER:  Oh. I didn't win?

    CLERK: Nah.

    PRODUCER: OK. Well, thanks for checking. Are you sure?

    CLERK: Yes.

    The clerk keeps the ticket, crumples it up, but doesn't throw it away. He puts it behind the counter. Our undercover player comes back outside to our car.

    CHRIS HANSEN: You think he saw the winning numbers?

    PRODUCER: He definitely saw.

    CHRIS HANSEN: Cause of the way he reacted?

    PRODUCER: Yeah, you guys hears him shriek, huh?

    When we go back into the store there he is—standing in front of the counter and studying our ticket. 

    CHRIS HANSEN: Hey, how are you? Chris Hansen with Dateline NBC. How are you? Do you recognize this young woman over here? She was just in here with some lottery tickets and she presented with what three lottery tickets?

    CLERK: Yeah she played the lottery ticket.

    The clerk denies even checking her numbers...

    CLERK: Yeah, I give it to her.

    CHRIS: And did you look yourself?

    CLERK: No I just give it to her to look at it.

    ...But, of course, on the tape, we plainly see him checking the ticket himself.

    CHRIS HANSEN: You kept this ticket. Why?

    CLERK: I don't keep this ticket.

    CHRIS HANSEN: But you did!

    CLERK 2: My friend, we have a recording here.

    CHRIS HANSEN: We recorded the whole thing.

    We show him the tape where he appears so excited.

    CLERK: Whoa!

    PRODUCER: What?

    You initially say, “Ahh!” Why did you say “Ahh?”

    CLERK: I just say “Ahh.” What do you mean is a “Ahh?”

    CHRIS HANSEN: Well, “Ahh” means, like, you found a winner!

    CLERK: These things, my friend, happen a lot.

    CHRIS HANSEN: So you just say “Ahh” all the time?

    CLERK: This is nothing, even though...

    CHRIS HANSEN: You crumple the ticket up and you take it behind the counter. You don't put it on the counter, you take it behind the counter.

    CLERK: My friend, I don't take it from over there, how come I put it behind the counters? And later on, she put it up there and...

    CHRIS HANSEN: No, no, no, later on you put it up there when you see us coming in with our cameras.

    The owner of this store declined to be interviewed, but insisted his clerk did nothing wrong.  But he also told us the clerk had been fired. 

    By the end of our investigation in New York City, we visit 45 stores. At almost half, we're never told by the clerk that our $500 ticket is a winner.  Again, those could just have been mistakes. But at that smoke shop, it appears the clerk knew it was a winner and kept it. 

    We wanted to speak to the New York Lottery about our investigation. The Lottery declined our request for an interview, but at a recent National Convention of Lottery Directors...

    CHRIS HANSEN:  Hey Mr. Medenica? How are you?

    ...we caught up with Gordon Medenica, the director of the New York Lottery.

    CHRIS HANSEN: Wondering if I could steal some time from you for a couple of minutes to talk about the lottery?

    GORDON MEDENICA: Ah, not right now.  I'm running with these folks.

    We wanted to show him video of what happened in that smoke shop in Greenwich Village. 

    CHRIS HANSEN: Can I show you a video?

    GORDON MEDENICA: No.

    CHRIS HANSEN: No?

    GORDON MEDENICA: I really have to run, I’m sorry.

    CHRIS HANSEN: You don't want to see the video?

    GORDON MEDENICA: What is it going to be?

    I told him about that clerk who kept that winning $500 lottery ticket.

    GORDON MEDINICA: Yeah, we investigate these things constantly. We just had someone arrested last week, two people in fact arrested. Last year we had, I think, 228 complaints and nine lottery retailers lost their license. We are very active in this all the time, we just don't need your show to help us do our job.

    CHRIS HANSEN: Don't you think it would be good to show people in New York what you're doing to protect the integrity of the lottery system?

    GORDON MEDINICA: It's more important that we actually protect the integrity of the lottery system and, most importantly, protect our players. We are interested in protecting our players, not creating a reality TV show.

    CHRIS HANSEN: It's not a reality TV show.

    GORDON MEDINICA: It's not journalism, that's for sure.

    CHRIS HANSEN: Oh, really?

    GORDON MEDINICA: Yeah.

    And it's not just our investigation Mr. Medenica doesn't like. He believes stings like those done by the California investigators are unfair.

    CHRIS HANSEN: Do you have a problem with what California does?

    GORDON MEDINICA: I think the way the stings were done were unrealistic and almost forced—not forced the retailers, but created a situation where people get tempted too easily. It's more like entrapment than a sting and that was out objection to it is that it was entrapment.

    Is that why the lottery issued that warning to New York retailers that Dateline was investigating?

    CHRIS HANSEN: Why was it that you told lottery retailers that we were trying to trick them into making them steal?

    GORDON MEDINICA: It’s obviously your interest to try to get them to commit a crime on television.

    CHRIS HANSEN: We're merely testing the system.

    GORDON MEDINICA: And it's our interest to keep people from committing crimes. That's why we wanted to warn them, be careful.

    CHRIS HANSEN: What's the most important thing you want people in New York to know about the integrity of the lottery system?

    GORDON MEDINICA: That we investigate, we have a good team, we do this all the time. We are hard on our retailers when they do something against the law, and we do it internally and we use legal investigative techniques and we cooperate with law enforcement authrorities – not reality television shows to get this done.

    Remember, when we presented our ticket to lottery retailers to see if they'd tell us it was a winner, we were doing exactly what Willis Willis did in Texas when he presented his million dollar ticket and had it stolen.

    So what happened to Willis?  Even though the Texas Lottery provided evidence leading to the indictment of that lottery clerk, the Lottery said the money belongs to the clerk, Pankaj Joshi.

    That baffled Willis' lawyer, Sean Breen.

    SEAN BREEN: I guess according to the Texas Lottery today, Mr. Joshi will go into the winners' hall of fame right along with Bonnie and Clyde.

    But the lottery was eventually overruled when a judge issued a court order awarding  Willis about $400,000 that had been frozen in the clerk's bank accounts. What happened to the rest of the money?

    That clerk, who is still a fugitive, may have taken up to $300,000 out the country.  Prosecutors are trying to get that money back as well. So, Willis is still out a lot of cash—but what he's got is at least enough to pay off medical bills and his childrens' education. 

    So what can you do to make sure that you get your money if you have a winning lottery ticket? You can start by checking your own tickets at an automatic scanner like this one. Or just go on line to check the winners and the rules.

    And there's something else.

    Joan Borucki is the Director of the California Lottery.

    JOAN BORUCKI: One of the most important things that the consumer can do when they get their tickets is sign 'em.  Even before you play the ticket, sign the ticket. 

    Oh—and one more thing. Since you are about 200 times more likely to be struck by lightning than to win one of those huge jackpots, you might also consider putting your money in a savings account.

Video: Calif. lottery official speaks out

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