Lottery winners use dead people's IDs to collect cash

Forty-six New Jersey lottery winners from July 2013 to July 2014 used Social Security numbers of dead people to collect their winnings, the state auditor said.

An audit released Wednesday said the use of dead people's identification numbers creates a risk of reduced tax revenue for the state, overpayment of public assistance and lost collections on child support, defaulted student loans and other debt.

Auditor Stephen Eells said that up to $890,000 in prize winnings could have been recovered if winners below $250,000 were checked for debts against the Treasury Department's Set-Off of Individual Liability system. The lottery now only checks winners of more than $250,000 in the SOIL system, but the audit recommends checks for all winners over $600.

Executive Director Carole Hedinger said during the Lottery Commission's monthly meeting Thursday that they are aware people try to cheat the system and are working to tighten their regulations.

"What we are working on is trying to find or get authorization to go even further to verify the legitimacy of social security numbers, something we are currently not authorized to do," Hedinger said, referring to federal law that she says prevents the lottery from performing automated Social Security matches for all state departments.

According to the commission, 26 winners were flagged as owing money after their Social Security numbers came up in various state agency databases in January. Twenty-three of them had their winnings garnished for things like public assistance, food stamps and student loans.

"That's a problem with all industries with people using illegal Social Security (numbers). In fact, we are ahead of the curve," said Lottery Commission Chairman Thomas Tucci. "We've been working to try to get that corrected, it's just a matter of getting the regulators to give us the authority to go further."

Hedinger said in her written response to the audit that the lottery has to balance providing good service and timely payments with its legal responsibilities. She said that the lottery collected nearly $300,000 from winners that owed the state.

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