Wakefield Man Pleads Guilty to Concealing Lottery Ticket Proceeds from Bankruptcy Creditors

BOSTON, MA—A Wakefield man was convicted today in federal court of two counts of bankruptcy fraud for concealing his interest in two $1 million winning lottery scratch tickets, as well as one count of filing a false tax return.

JAMES S. GREGSON, 39, of Wakefield, pleaded guilty before U.S. District Judge George A. O’Toole to two counts of bankruptcy fraud and one count of filing a false tax return. At today’s plea hearing, the prosecutor told the court that had the case proceeded to trial, the government’s evidence would have proven that Gregson had purchased a $1 million winning “Windfall” lottery ticket that paid, after taxes, $35,000 annually. In 2003, Gregson also purchased the right to at least 15 $35,000 annual payments from a second $1 million winning “Bonus for Life” lottery ticket, but Gregson failed to disclose his interest in either in his 2005 bankruptcy case.

In addition, the prosecutor told the court that when Gregson’s bankruptcy trustee received a tip that Gregson owned a winning lottery ticket, Gregson testified falsely under oath that his parents had funded the purchase of the ticket, when in fact Gregson himself had done so. Gregson also filed a 2003 federal income tax return which falsely stated that his total taxable income was $0, when in fact it was more than $450,000 and he owed about $169,000 in taxes.

Judge O’Toole scheduled sentencing for January 18, 2011. Gregson faces up to five years’ imprisonment, to be followed by three years of supervised release and a $250,000 fine on each of the two bankruptcy fraud counts, and three years’ imprisonment, to be followed by one year of supervised release and a $250,000 fine on the false tax return count.

United States Attorney Carmen M. Ortiz, Richard DesLauriers Special Agent in charge of the Federal Bureau of Investigation - Boston Field Office and William Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Mark J. Balthazard of Ortiz’s Economic Crimes Unit.