NJ man admits running illegal "Pick 6" lottery, evades $65,000 in taxes

Apr 22, 2021, 2:55 pm (25 comments)

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Illegal gambling business took in $250,000

By Kate Northrop

A man from Ocean County, New Jersey pleaded guilty to operating an illegal lottery on Tuesday after having drawn in $250,000 in cash proceeds from the scheme.

Edward O'Neill, 54, of Beachwood appeared before U.S. District Judge Brian R. Martinotti via videoconference and pleaded guilty to charges against him, including one count of managing an illegal gambling business and one count of subscribing to a false tax return.

According to the District of New Jersey, O'Neill evaded more than $65,000 in federal taxes on his earnings.

Case documents and statements made in court detail the scheme that operated between 2014 and 2019, during which O'Neill managed an illegal lottery fashioned after the New Jersey Lottery's Pick 6 draw game.

"Players" participated by paying a $20 entry fee and selected six numbers from a pool of 1 to 49. Participants who matched their numbers to the numbers drawn in the New Jersey Lottery's official Pick 6 game would win a cash prize. O'Neill documented identifying information for each player along with their numbers into ledgers and monitored the Lottery's official Pick 6 results.

The ledgers O'Neill kept recorded up to 8,000 participants in one single drawing of his illegal lottery, with the cash prizes for each drawing often exceeding $100,000.

O'Neill gave himself a 10 percent cut of the winnings for each drawing in exchange for operating and managing the illegal lottery, a press release by the District of New Jersey said. After generating $250,000 in profits and failing to report his earnings on tax returns he filed with the IRS between 2014 and 2018, he skirted his federal income taxes by $65,674.

The maximum penalty for managing an illegal gambling business is five years in prison, while subscribing to a false tax return carries a maximum sentence of three years in prison. For both charges, O'Neill may also be subjected to a $250,000 fine or twice the gross gain or loss from the offenses, whichever is greater.

O'Neill's sentencing is set to take place on Aug. 25, 2021.

Lottery Post Staff

Comments

Unlucky-Kenny's avatarUnlucky-Kenny

Dang! This has to be one of the most interesting stories I have read on here! 

Thanks Todd.

Can't trust no one from New Jersey!

LOL

hearsetrax's avatarhearsetrax

nothing would surprise me about the state of new jersey 😏

rcbbuckeye's avatarrcbbuckeye

First thing I thought when I saw the headline was it was about Todd.......

JUST KIDDING!!!!

    Green laugh

Bleudog101

Though lotteries (official) weren't around in the 40's this story makes me think of that era, and even before.

Too many checks and balances to try to pull off an old crime like this.

Dumpster diving today yielded $10!   Then read an email from KLC that I have a free MM ticket for being a KY Fun Club Member for over a year!   Life is good.

rcbbuckeye's avatarrcbbuckeye

Quote: Originally posted by Bleudog101 on Apr 22, 2021

Though lotteries (official) weren't around in the 40's this story makes me think of that era, and even before.

Too many checks and balances to try to pull off an old crime like this.

Dumpster diving today yielded $10!   Then read an email from KLC that I have a free MM ticket for being a KY Fun Club Member for over a year!   Life is good.

Wouldn't that be a nice surprise if that free MM ticket wins the jackpot.

Bleudog101

Quote: Originally posted by rcbbuckeye on Apr 22, 2021

Wouldn't that be a nice surprise if that free MM ticket wins the jackpot.

With Covid-19 it is easier, for the time being to remain anonymous.

If I were to get surprised as you say, I'd have Chip Polston, KLC  contact Todd to do an anonymous story on me!

Haven't been to Fun Club yet, but I'm sure it won't have a Megaplier...but beggars can't be choosers.   Second place is fine with me!

Stack47

Many years ago I participated in a similar game which was legal according to the County Prosecutor. We paid $5 ($2.50 per draw) a week to pick six Ohio Lotto numbers and the first to get all six won the prize pool. 

The ledgers O'Neill kept recorded up to 8,000 participants in one single drawing

We had 30 at tops and maybe why ours was legal.

Long Odds

Illegally obtained evidence- fruit of the poisonous tree- is prohibited from admittance but illegally obtained revenue is subject to taxation and even represents a separate crime. Another reminder that all the money is viewed as the governments and we should consider ourselves fortunate that we are allowed to keep any.

Bleudog101

Quote: Originally posted by Stack47 on Apr 22, 2021

Many years ago I participated in a similar game which was legal according to the County Prosecutor. We paid $5 ($2.50 per draw) a week to pick six Ohio Lotto numbers and the first to get all six won the prize pool. 

The ledgers O'Neill kept recorded up to 8,000 participants in one single drawing

We had 30 at tops and maybe why ours was legal.

Keyword.....LEGAL in your case!

Stack47

he skirted his federal income taxes by $65,674.

It says O'Neill collected up to $160,000 per drawing for five years and at 10% should have made around 6 million. Nice of the IRS charging less than 2% for taxes.

s5thomps's avatars5thomps

Why would a person put in 20 dollars on a illegal lottery based on the Jersey Pick 6 when you could play it legally for a $1.00? Makes no sense to me. Plus the payout is higher if you hit!

No Pity!

rcbbuckeye's avatarrcbbuckeye

Quote: Originally posted by s5thomps on Apr 22, 2021

Why would a person put in 20 dollars on a illegal lottery based on the Jersey Pick 6 when you could play it legally for a $1.00? Makes no sense to me. Plus the payout is higher if you hit!

No Pity!

I was asking myself that also. And he had a list of 8000 players?

Unlucky-Kenny's avatarUnlucky-Kenny

Quote: Originally posted by rcbbuckeye on Apr 22, 2021

I was asking myself that also. And he had a list of 8000 players?

Only thing I can think of is that if they win they wont be filling out a tax form when they collect?

haha

Soledad

I'm confused. So he took what 10% of each game. Each game made $100,000? And in 5 years time or whatever he generated $250,000? A little confused. So, trying to figure this out, $10,000 x 25? I don't know.

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