TICKETS HANDLED APPROPRIATELY IN SECURITY CHECKS
INVOLVING $1.5 MILLION IN PRIZES

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Operation Starburst Conducted In 48 Counties As Powerball Jackpot Continues To Climb

DES MOINES, Iowa – The Iowa Lottery has conducted another round of unannounced security checks at retail locations across the state and store personnel again handled all tickets appropriately.

The latest checks involved much larger prize amounts than those in previous operations and utilized undercover law enforcement officers. The efforts created enormous buzz about lottery winners in Iowa, but resulted in no charges against retail employees.

Lottery investigators and agents from the Iowa Division of Criminal Investigation posed as customers and visited 217 randomly-selected retail locations statewide this month, presenting tickets for cashing that involved a total of $1.5 million in prizes. The security project, known as Operation Starburst, was planned and carried out over the past few weeks. All tickets were handled appropriately by retail staff at the locations checked.

Joe Diaz, the lottery's vice president of security who oversaw the operation, said Thursday that the lottery's ongoing security checks are designed to ensure that retailers and lottery players are following the rules.

"All sides must have confidence that the lottery's games are fair and secure," Diaz said. "Through our compliance operations, we now have checked retailers in a majority of Iowa's counties. What has been revealed is a retail system that is functioning well. But there have been problems with lottery-ticket redemption outside Iowa, so we must remain vigilant."

In Minnesota, eight people who worked at retail locations were charged with felony lottery fraud after retail compliance checks by the Minnesota Lottery in December and January. Investigators said each of the clerks kept a winning ticket they were presented and attempted to claim the prize themselves.

And this year in California, more than two dozen people working at retail outlets have been arrested for the grand theft of winning lottery tickets as part of checks by the California Lottery. All of the California suspects were accused of cheating lottery customers.

The Iowa Lottery's latest compliance checks follow earlier rounds in February, April and May. The approach utilized has varied, involving smaller prizes that can be cashed at the retail level as well as prizes of more than $600, which much be claimed at a lottery office. Men and women have posed as the customers presenting tickets for cashing, and the compliance checks have been conducted both during the day and night.

Iowa Lottery CEO Terry Rich said that the lottery was pleased to work with the DCI in its latest checks.

"We are happy with the ongoing effort to prevent lottery fraud in Iowa," Rich said. "But the overall goal is to tell customers that signing their tickets prevents most opportunity for being scammed."

Charis Paulson, assistant director of the DCI, also said the project was successful.

"The Iowa Division of Criminal Investigation worked effectively with the Iowa Lottery Authority to maintain the integrity of the Iowa Lottery and its ticket redemption procedures," she said. "The results of the project are impressive and demonstrate how responsible lottery retailers are in serving customers of the Iowa Lottery."

The undercover investigation ended, ironically, within hours of a "Dateline NBC" broadcast focusing on the lottery investigation and arrests in California. Sentences for those prosecuted in the California investigation have averaged jail time of 3-4 months along with 3 years' probations and community service time in some instances.

Iowa is one of the few states that classifies lottery fraud as a felony rather than a misdemeanor, giving law enforcement personnel here even more force to use in their investigations.

Diaz said that the latest checks were intentionally timed to occur during a period of high lottery sales driven in large part by the Powerball jackpot, which has reached an estimated $161 million for Saturday's drawing.

Diaz also said that something unexpected happened during this round of security checks: When tickets for prizes of thousands of dollars were presented, not only did store personnel handle the tickets appropriately, they often celebrated with the supposed winner.

"People in the stores were just really happy for the investigators and agents who came in with the tickets," Diaz said. "In one location, applause even broke out for 'the big winner.' It was nice to see that reaction from Iowans to another person's good fortune."

The lottery continues to work with retail locations to ensure that store personnel are requiring customers to sign their lottery tickets before they can be checked or cashed. During the lottery's initial checks in February, about half the retail locations visited did not require signatures on tickets. That number has improved, with nearly two-thirds of locations requiring signatures in the latest checks.

Diaz said a few locations have repeatedly failed to require that customers sign their lottery tickets. Those locations will receive letters of warning from the lottery and be visited by lottery security personnel, who can discuss the ticket-signature requirements with them, he said. The easiest way for consumers to protect themselves is by signing their tickets as soon as they are purchased, he said, because that identifies the tickets as belonging to that person.

Retailers checked by the lottery and DCI this month include a mix of businesses in 48 counties: Appanoose, Black Hawk, Boone, Buena Vista, Butler, Carroll, Cerro Gordo, Clinton, Decatur, Des Moines, Dubuque, Franklin, Greene, Grundy, Hamilton, Hancock, Henry, Humboldt, Iowa, Jackson, Jasper, Jefferson, Johnson, Jones, Keokuk, Kossuth, Linn, Louisa, Lucas, Mahaska, Marion, Marshall, Monroe, Muscatine, Plymouth, Polk, Pottawattamie, Poweshiek, Scott, Story, Tama, Van Buren, Wapello, Warren, Washington, Wayne, Webster, and Woodbury.

Anyone who has a concern about the lottery, its products or operations should contact the lottery at 515-725-7900 or e-mail the lottery at Wmaster@ialottery.com. Anyone with a security-related concern should make their inquiry directly to the Lottery Security Department at 515-725-7888.

Since the Iowa Lottery's start in 1985, its players have won more than $2.4 billion in prizes while the lottery has raised nearly $1.2 billion for state programs.