Michigan Lottery customer complaints lead to fines, suspensions, criminal charges

LANSING — Lottery players took their winning tickets to collect their prizes, only to find their cash had already been paid to someone else.

Others shelled out big bucks on instant games, only to find their tickets had already been partially scratched, surreptitiously, and determined to be losers.

And retailers told players that if they wanted to cash their winning tickets at their store, they would have to kick back a share of the proceeds.

Those were among the complaints Michigan Lottery officials investigated this year and last, as revealed in records the Free Press obtained under the Freedom of Information Act. Some complaints resulted in fines and suspensions for retailers. In at least two cases, prosecutors pressed criminal charges.

Jake Harris, the Michigan Lottery's player relations manager, said annual complaints impact only a tiny percentage of the agency's 10,500 retailers, but all are taken seriously and investigated to help ensure game integrity so that both players and retailers "feel comfortable buying and selling lottery tickets."

A growing problem has been lottery players posting their winning tickets on Facebook pages or other social media platforms, with bar codes showing, and then finding someone else has already collected their prizes when they turn in their tickets to collect their winnings.

Between Jan. 25 of last year and May 1 of this year, the Lottery investigated 13 such instances involving cashed prizes — mostly from Daily 4 tickets — that were collectively worth more than $6,300, records show.

In each case, a retailer cashed the tickets after they were shown an image of the winning ticket on a smartphone, records show. That's despite the fact it's against the rules for retailers to award prizes without having the actual winning ticket in hand. In most cases, the retailers told Michigan Lottery officials they weren't aware of that prohibition.

The Michigan Lottery has stepped up its outreach to both retailers and players, as a result of the Free Press raising the issue, though such instances remain relatively rare, at 10 to 15 cases per year, Harris said.

"We always encourage players, don't post pictures of your winning tickets on social media," Harris said.

"We rely on our retailers and our communications with retailers to make sure they are not cashing these types of prizes."

Generally, the retailers absorbed the loss by paying off the actual ticketholder after already paying the impostor who swiped the winning ticket image off social media.

But in at least two cases, it was retailer employees who were pocketing the money.

In late January of this year, a 20-year-old Michigan man scratched an instant game ticket and found it was a $500 winner. He took it to a Clay Township pizza shop to collect his prize but was told the ticket had already been redeemed. He then tried again at an Algonac liquor store but received the same bad news.

When he contacted Michigan Lottery, the man said the ticket had never been out of his possession. But he later learned that his girlfriend had taken a photo of the ticket and used SnapChat to send it to two of her friends, along with a joke about going on vacation. One friend who the girlfriend said was sent the image, Lucas Matti, was the son of the owners of a Shell station on 26 Mile Road in Lenox Township where the ticket was cashed, according to Michigan Lottery records. In May, Matti, 22, pleaded no contest to misdemeanor larceny and completed three months of probation, resulting in dismissal of the charge, records show. The Michigan Lottery also placed the family's Shell station on probation, until next May. Matti told the Free Press he felt there was no proof he did anything wrong but it was less expensive to plead no contest than to fight the case in court.

In another case, in April and May of last year, a manager at Buffalo Wild Wings in Troy was suspected of swiping images of six winning tickets worth a total of $2,508 from postings on Facebook groups devoted to lottery play, and using the restaurant's lottery license to validate and cash the tickets before the rightful owners had a chance to do so. The employee suspected of stealing the images, who played Daily 4 at the restaurant, "ran off" when Michigan Lottery first called about the issues and was immediately terminated, records show. The restaurant agreed to pay off the actual winners, and no further action was taken by Michigan Lottery, and it's not clear that any criminal charges were brought.

It's a good idea to sign the back of a lottery ticket after purchase and keep it in a safe place, Harris said.

He wouldn't say whether Michigan Lottery would ever make an exception to its rule that photo images of winning tickets are not redeemable. What would happen, for example, if a $1 million Powerball ticket got burned up in a house fire, the time to redeem the ticket was expiring with no claims for it brought forward, and the purchaser had taken a photo of the winner prior to the fire?

"I can't really speak in hypotheticals," Harris said. "Generally speaking, you do have to have that ticket."

Though the social media postings of winning tickets are a more recent phenomenon, the complaints obtained by the Free Press show that a long-standing issue continues with a minority of retailers selling instant game tickets that have already been scratched and found to be losers.

Between January of last year and May of this year, Michigan Lottery investigated 15 complaints related to more than 360 suspected pre-scratched tickets that would have cost more than $2,000 to purchase. Investigations found wrongdoing at the retailer in just over half of those cases.

"Any time a player feels that they have purchased a ticket that is tampered with or damaged, they should give us a call," Harris said.

More: What happens when Michigan lottery retailers try to game the system

"In the very rare instances where it was determined that a retailer scratched a ticket or pre-scratched a ticket, these were investigated and action was taken accordingly."

Typically, players got their money back and store employees suspected of pre-scratching tickets and offering them for sale got fired.

But in at least one instance, criminal charges resulted.

In late May, a customer complained after he bought a $50 instant game ticket at Sukh 21 Liquor Store in Gladwin and noticed scratches on the ticket that he believed were enough to determine, prior to sale, that the ticket was a loser.

That complaint, along with a similar complaint related to the same store, prompted an investigation that led to the discovery of more irregularities and the June 10 resignation of a store manager, Jennifer Ann Wallace, 41, of Gladwin. Lottery investigators and sheriff deputies obtained video of Wallace cashing winning instant game tickets at two other nearby retailers, according to a report obtained through FOIA. Sukhwinder Singh, the owner of the store, said Wallace disappeared when he started asking questions, along with a $750 book of $50 instant game tickets.

Wallace was arraigned Tuesday in Gladwin County Circuit Court on felony charges of embezzlement over $1,000, which is a five-year felony, and larceny, a four-year felony, records show.

Andrew Santini, a Clare lawyer representing Wallace, did not respond to an email requesting comment.

In January 2022, in the small Newaygo County community of Brohman, a customer complained about spending $120 on nine instant game tickets, only to find that each had already been partially scratched. Then, a week later, another customer complained about a similar experience after spending $60 on six tickets.

Investigators visited the Brohman EZ Mart and found 20 more pre-scratched tickets, with total face values of $345, available for sale. Like the ones purchased by the customers of the convenience store, all had been previously scanned and determined to be losers.

Surveillance video pointed to a store employee, who admitted to secretly scratching the tickets "due to financial hardship in her life." She said her cheating resulted in her finding and cashing winning tickets worth between $100 and $150 and offered to pay all the money back, records show. The store fired her but did not call the police, according to the lottery reports.

And in another case, only a change of ownership pre-empted serious ramifications for a service station in Livonia.

Around the beginning of October, a customer complained she purchased at least six $50 instant game tickets that had small scratch marks within the bonus areas, at what was then a Sunoco station on West Eight Mile near the border of Livonia and Farmington Hills.

When Michigan Lottery investigators visited the outlet Oct. 12, they found, and seized, 143 additional tickets offered for sale that had scratch marks in the bonus areas. The next day, they found and seized 158 more tickets that had been tampered with in the service station's back inventory.

None of the employees admitted any involvement and a review of surveillance video was inconclusive.

More: Gaming the system: Michigan Lottery cracks down on retailers who cheat customers

Then, in April of this year, Michigan Lottery was advised a new owner had taken over and only one person who worked for the former owner had been kept on. A new inspection found no suspicious scratch marks on any instant game tickets offered for sale, and the case was closed in June after the initial complainant was refunded $300 for the tickets she had purchased, records show.

Michigan Lottery also investigated complaints about customers getting shortchanged, getting charged extra to buy lottery tickets with a debit or credit card, and, in a couple of instances, getting asked to "kick back" some or all of their lottery winnings to the retailer. But the kickback allegations were never substantiated and likely arose from misunderstandings or lame attempts at humor.

In late May of this year, a customer complained that when she went to cash two winning tickets worth a combined $12 at Crown Liquor in Canton, she was told she could only redeem the tickets there by purchasing $12 worth of items at the store.

The customer told Michigan Lottery officials she was annoyed enough to complain because it was the third time something similar had happened at the same store. She told the clerk, who happened to be the store's owner, she would take her winning tickets elsewhere and said the owner replied that was fine with her.

The owner told the Michigan Lottery investigator she recalled the incident. She said it had been a slow day at the store and she did not have enough cash in the till to pay the winnings.

The investigator told the owner it was understandable the store did not keep large amounts of cash on hand, but "it would appear $12 would not be considered a large amount."

However, the store owner said they keep less cash on hand since the COVID-19 pandemic began.

The investigator noted Michigan Lottery rules do not prescribe any minimum amount of cash that retailers must keep on hand and told the owner "she did not do anything that would be considered a violation of her lottery license."

Last year in Owosso, northeast of Lansing, a customer who went to Ricks Quik Stop to cash a winning lottery ticket complained that the cashier told her she had to give him one-third of her winnings in return for cashing it, records show.

When Michigan Lottery investigators visited, the manager told them her assistant manager "sometimes jokes with the customers when they are cashing a ticket, but it is only a joke and he is not serious."

One of the investigators told the manager "it was not construed as a joke for this particular customer, and the joking about keeping a portion of the prize or receiving a tip when cashing a ticket should stop immediately."

The assistant manager was spoken to and no further action was taken, records show.

A week later, in June 2022, lottery officials in Lansing received a similar complaint after a customer went to cash a winning ticket at Prince Liquor and Wine Shop in Southfield.

The cashier, an older gentleman, "told her that he will only cash her tickets if he gets some of the winnings," the record of the complaint shows.

The store's owner expressed surprise and doubt that any of his employees would say such a thing, but he said he would ask around.

The owner was advised "it could be a good time for a reminder again on how to handle lottery transactions and not asking customers for a share of their winnings."

Contact Paul Egan: 517-372-8660 or pegan@freepress.com. Follow him on X, formerly known as Twitter, @paulegan4.

This article originally appeared on Detroit Free Press: Michigan Lottery customer complaints lead to fines, suspensions, criminal charges