MANDEL: Family found guilty in $12.5M insider lottery scam

Their luck has finally run out.

More than 14 years later, a GTA family has been convicted in an insider lottery ticket stealing scam that netted them a $12.5 million windfall.

Kenneth Chung, who operated Variety Plus in Burlington, and his father Jun-Chul Chung, who worked there part-time, were found guilty this week of stealing lottery tickets during an eight-month period ending in February 2004.

Jun-Chul Chung (seen here), his son, Kenneth Chung, and daughter, Kathleen Chung, were involved in a 2004 lottery ticket scam that netted the family $12.5-million.

The father was convicted of stealing the winning $12.5 million ticket in December 2003 and was found guilty with his daughter Kathleen Chung, who falsely claimed the winnings, of possessing stolen property and defrauding OLG.

All three were acquitted on a charge they tried to hide the money in offshore bank accounts in South Korea.

“There is no doubt, in my view, that the evidence discloses a scheme to steal free play lottery tickets,” wrote Ontario Superior Court Justice Douglas Gray in his lengthy judgment released this week.

And their scheme hit the jackpot

From left: Kathleen Chung, brother Kenneth Chung and father Jun-Chul Chung during an appearance in Milton court on Sept. 29, 2010.

According to the ruling, OLG’s computer system showed the winning Lotto Super 7 ticket can be traced to a series of four tickets purchased by one person, likely Dan Campbell, in St. Catharines on Dec. 19, 2003. All four tickets were checked at Chung’s variety store three days later and resulted in five free play tickets.

But Campbell was only given four of them, which were all later validated together in St. Catharines, the court ruled. The fifth, which was checked at Chung’s store, turned out to be the winning ticket.

“It is clear, in my view, that there is only one reasonable conclusion,” Gray said. “The winning free play ticket was kept by Jun-Chul Chung for himself after he validated all of the tickets on December 22, 2003. In so doing, he stole that ticket from its rightful owner.”

Jun-Chul Chung, his son, Kenneth Chung, and daughter, Kathleen Chung (seen here), were involved in a 2004 lottery ticket scam that netted the family $12.5-million.

On Feb. 5, 2004, Kathleen Chung came to the OLG prize office in Toronto to claim the $12.5 million prize. She initially denied being related to Kenneth Chung at the Burlington store and said she couldn’t remember where she bought the original ticket.

She later admitted to lottery officials that her brother managed the Burlington store and now claimed she may have bought the ticket in the St. Catherine’s area while making deliveries for her father’s business.

Despite their reservations, OLG paid her in December 2004.

Most of the money was then transferred to Seoul where her aunt lived, the court ruled. The proceeds were believed to have been used to purchase multi-million dollar mansions in Oakville and Thornhill as well as several luxury cars.

This Oakville home is one of two houses purchased with the $12.5-million winnings from a 2004 lottery fraud involving Jun-Chul Chung, his son, Kenneth Chung, and daughter, Kathleen Chung.

The judge concluded the winning ticket could not have been hers.

“Kathleen Chung has lied throughout about her purchase of the original ticket and the validation of the winning ticket,” the judge said. “Apart from the OLG computer records, her cellphone, banking and Visa records show that she could not have been where she said she was at the relevant times. She obviously lied to the OLG personnel about being the legitimate owner of the ticket, and how she came to possess it. She knew the ticket was stolen.”

Her brother, though, was acquitted on all charges involving the winning ticket after the judge found the Crown hadn’t proven beyond a reasonable doubt that Kenneth Chung was in his store at the time or knew for sure it was stolen.

Jun-Chul Chung, his son, Kenneth Chung (seen here), and daughter, Kathleen Chung, were involved in a 2004 lottery ticket scam that netted the family $12.5-million.

The Chung case was highlighted as the most shocking example of unscrupulous store clerks fraudulently claiming millions in lottery prizes in a 2007 report by former Ontario Ombudsman André Marin. He accused OLG of being “too cozy” with its retailers and paying out $100 million to “lottery insiders.”

Following a public uproar, the OPP launched an investigation and charged the Chungs in 2010.

Meanwhile, the rightful owners of the ticket — Campbell and six friends who worked together on a Burlington construction site — claimed the massive payout, plus interest, a year later.

OLG declined comment on the verdicts “as we have entered the sentencing phase of the trial.”

Spokesman Tony Bitonti also declined to comment on the agency’s lawsuit to recoup the $12.5 million.

“It is important to remember that the accused’s assets have already been frozen through the criminal court process,” he said. “At present, OLG’s civil suit is temporarily on hold until such time as the criminal trial process is completed.”

Sentencing is scheduled for September.

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Source:: Toronto Sun – Movies