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U.S. Officials Investigate Lottery Busters in Virginia Win

February 27, 1992 GMT

SYDNEY, Australia (AP) _ U.S. officials are trying to find out if a group of Australian lottery players beat the system and won $27 million from the Virginia Lotto with a mass purchase of tickets.

No one is claiming anything illegal occurred, but lottery officials around the United States are worried about the impact on small-time lottery players, who will be skeptical about their chances of winning.

Ray Burson, a spokesman at the U.S. Embassy, said investigations are under way in Australia and Washington to determine if an Australian investor group bought up most of the numbers and won the Virginia lottery Feb. 15. He said the FBI was involved.

Speculation has focused on the Melbourne-based International Lotto Fund and Stefan Mandel, a consultant to the group who has made a career out of trying to beat lottery systems.

The International Lotto Fund told its 2,500 investors in a letter Feb. 20 that it won a major overseas drawing the previous weekend.

The letter did not specify Virginia but said the prize had not been claimed yet, as is the case in Virginia as of early today. The winner has 180 days to claim the prize.

The syndicate that holds the winning ticket may be trying to sell it in order to keep its role in the lottery secret and collect its winnings now, rather than wait for it to be paid out over 20 years.

Managers of the investment fund have been unreachable for comment. Mandel denies he personally won any prize and says he has no stake in the fund.

Virginia lottery officials said a group bought 5 million of the possible 7.1 million combinations of six numbers - from one to 44 - before apparently running out of time. The $1 tickets were bought from as many as eight grocery and convenience store chains that handle lottery sales.

The group did face risk.

There was a three in 10 chance it would not hold the winning combination. And if four other tickets carried the winning number, the group would have just broken even, which would be a loss since the money is paid out over 20 years.

Block buys of lottery tickets are not illegal in Virginia, but lottery officials acted Monday to discourage them. The Lottery Board ordered retailers to give preference to customers waiting in line over people who leave mass orders to process.

Mandel, 51, first drew notice from a $5.2 million lottery win in New South Wales state in November 1986. He and a group of less than 20 people spent $760,000 to cover all 3.8 million possible combinations, using a computer to fill out the forms.

But when 11 winners emerged, Mandel’s group found itself netting just $72,000 with its share of the jackpot and minor prizes for other tickets. Mandel said that really meant no profit because of the time and equipment required to buy the tickets.

His effort led Australian officials to ban syndicates operating for profit and lottery forms marked by mechanical means.

Despite the controversy in Virginia, state lottery director Kenneth Thorson has managed to find a bright spot - the prospect of the winner sorting through millions of tickets for the one carrying the six correct numbers.

″Watching them try to find the one winning ticket would be quite a sight,″ he said.