Ombudsman: Iowa Lottery Should Focus On Fraud

The Ombudsman found problems with the lottery's response to eight customers who complained they were sold tickets that appeared to be tampered with. The lottery also failed to adequately investigate a retail store owner's theft of $86,000 in lottery tickets by four employees, the report said.

The Ombudsman also noted at least nine retailers and store employees who collected five or more major prizes. They included a store owner and clerk who each claimed $250,000 in prizes within three months of each other in 2007; a retailer who claimed 67 prizes for more than $100,000 since 2005; and a convenience store manager who claimed 17 prizes totaling more than $33,000.

In that case, the manager with charged with first-degree theft in connection with the theft of $45,000 in lottery tickets and cash from a pull-tab machine in 2007.

The report indicated that in interviews with the Ombudsman, lottery investigators acknowledged that retailers who play receive no more scrutiny that other customers.

The Ombudsman also found that the lottery routinely failed to seek recovery of prize money that was won through stolen tickets and has allowed store owners to determine whether clerks who steal tickers or defraud customers should be referred for prosecution.