Pennsylvania Auditor General Eugene DePasquale says he wants to make sure no one is committing fraud in the state lottery system.
DePasquale will conduct a performance audit to ensure the Department of Revenue is monitoring fraud by retailers and winners.
A news report led other states to investigate high-volume lottery prize claimants, according to information from DePasquale. He cited a Massachusetts case where a man admitted he was purchasing winning lottery tickets from players to help them avoid paying taxes. The man pleaded guilty but made about $10.8 million by cashing in 7,300 tickets before he was caught.
“When this issue first surfaced several years ago, I warned that I would be monitoring the situation,” DePasquale said. “Some lotteries have taken major steps to crack down on suspected fraudulent claims and I want to ensure that the Pennsylvania Lottery is doing everything possible to prevent and stop any fraud.”
The Lottery is part of the Pennsylvania Department of Revenue.
“As a bureau within the Department of Revenue which collects taxes, the Lottery should be able to say with certainty that no one is committing tax fraud,” DePasquale said.
DePasquale told reporters he decided to audit the lottery before reports surfaced that $1.3 million was spent in procurement costs to determine who would run the lottery’s terminal based games. Only two bidders are in the running, according to reports.
The Pennsylvania Lottery began in 1972. Proceeds from lottery sales go to programs that benefit senior citizens.
“My goal is to protect older adults who rely on Lottery-funded programs,” DePasquale said in a statement. “If players or retailers are committing fraud, the Pennsylvania Lottery has an obligation to catch them and take action to protect the integrity of the Lottery Fund.”
DePasquale said he will also look at the Revenue Department’s sexual harassment policy.
The Revenue Department spent $900,000 in 2016 settling a case brought by a woman against a manager in the department.
“The details of the case are absolutely horrifying,” DePasquale said. “Taxpayers should be furious that their tax dollars had to be used for these purposes. I want all state agencies to learn from that case and put an end to sexual harassment, once and for all.”
The Department of Revenue did not immediately respond for a request for comment.
DePasquale did not give a specific guideline as to when the audit would be finished, telling reporters he instructors his auditors to be “thorough and quick.”