NJ man ran side lottery off Pick 6, skipped $65K in taxes
An Ocean County man has admitted to running an illegal lottery and skipping out on more than $65,000 in federal taxes on his earnings from the scheme, Acting U.S. Attorney Rachael Honig announced Tuesday.
Edward O’Neill, 54, of Beachwood, pleaded guilty during a remote appearance in federal court.
O’Neill ran a private “side hustle” out of Hudson County, based on the New Jersey Lottery’s official Pick Six game, according to federal prosecutors.
Over a five-year span ending in 2019, he would collect $20 from each player, who also submitted six numbers between 1 and 49. The official lottery game is just $1 to play.
When the official state lottery game picked its numbers twice a week, the first person with the same numbers from O’Neill’s illegal side game also could win and be paid in cash from his pool.
In exchange, he kept a 10% cut of the winnings from each drawing, which often was more than $100,000, federal authorities said.
According to ledgers kept by O’Neill, each drawing of his illegal lottery included anywhere from five players up to 8,000 participants.
O’Neill admitted that he failed to report about $250,000 in cash winnings from his illegal lottery on tax returns filed with the IRS between 2014 and 2018, causing him to underpay federal income taxes by $65,674.
The charges of managing an illegal gambling business and subscribing to a false tax return could mean up to five and three years in prison, respectively, when O’Neill is sentenced in late August.
He also faces potential fines of $250,000 or twice the gross gain or loss from the offenses, whichever is greater.