Ex-lottery sentinel to serve 37 months
Judge orders $482,671 in restitution
The Arkansas Scholarship Lottery’s original deputy security director was sentenced Thursday to just over three years in federal prison for using his inside access to steal 22,700 tickets from fall 2009 to fall 2012.
The tickets had a face value of $477,893 — the amount of money customers would have paid for them — but it is unknown how many were “winning” tickets, or how much money Remmele Mazyck pocketed by cashing in the winners.
Defense attorney John Wesley Hall of Little Rock said Mazyck only cashed in winning tickets of $500 or less to avoid having to officially identify himself as a winner.
Although Mazyck admitted that he used $11,000 from his “winnings” to make a credit card payment in July 2012, Hall said Mazyck used the great majority of the proceeds to buy more lottery
tickets, to feed a gambling compulsion.
Because Mazyck said he pumped most of his illegal proceeds back into the system, which raises money for college scholarships, Hall argued that it supported leniency for his client. While the amount of cash that Mazyck pocketed is unknown, Hall said after court that he wouldn’t be surprised if Mazyck netted $100,000 and retained very little of it.
Hall said no one has made an effort to determine the total amount Mazyck pocketed because it wasn’t necessary for sentencing purposes. He noted that Mazyck stipulated at his July 12 plea hearing that he stole $477,893 worth of tickets, and that he will be required to pay back that amount, plus related expenses such as commissions paid to retailers, for a total of $482,671.93.
Federal sentencing guidelines, taking into account the stipulated amount and other factors, recommend a 37- to 41-month penalty range for Mazyck’s two charges — one count each of wire fraud and money laundering.
In imposing a 37-month sentence, at the low end of the guideline range, U.S. District Judge Susan Webber Wright acknowledged that she was authorized under federal statutes to impose a strictly probationary sentence, as requested by Mazyck’s mother, but she said prison time was necessary because of the damage Mazyck did to the lottery’s reputation, which in turn has affected the availability of scholarships.
Mazyck, 34, who returned to his home state of South Carolina after he was fired, has remained free but under the supervision of federal probation officers until his sentencing hearing. In giving him until Jan. 6 to report to prison, Wright allowed him to remain free through the end-of-year holidays and to be by his mother’s side later this month when she has brain surgery.
His mother, Sabra Mazyck, told the judge from a courtroom lectern that Mazyck grew up in the Catholic Church and was a “role model for his friends” until he became a compulsive gambler and “totally strayed from his upbringing.”
She said he has a 3-monthold son, to whom his wife gave birth just four days after he pleaded guilty, and that he also helps care for a stepdaughter. Sabra Mazyck said she has been diagnosed with a brain tumor but delayed her surgery until after her son’s sentencing.
“Please grant him probation,” she pleaded.
Hall asked the judge to consider imposing a two-year sentence, below the range recommended by sentencing guidelines, noting that Mazyck cooperated with authorities after he was caught to help a lottery vendor, which also operates in other states, from being victimized in a similar way by others.
“While the loss is staggering, his personal gain was not that much,” Hall argued.
Standing in front of the judge, Mazyck apologized to lottery officials and his family, saying, “I didn’t know I had an addiction … until it was too late.” He added that his gambling habit “isn’t an excuse, but a reason” for his actions.
He told Wright that as the deputy security director, he was able to figure out the system’s vulnerability and, through the lottery’s computer system, activate winning tickets he had stolen from the lottery’s warehouse. He also admitted to trying to cover his thievery after cashing in tickets by logging into the system and labeling them “voided by security.”
Mazyck was one of several people hired by former Arkansas Lottery Director Ernie Passailaigue in 2009 when he came to Arkansas to start up the state’s lottery program after directing the South Carolina lottery, He hired Mazyck at a salary of $75,000.
Wright also heard Thursday from Assistant U.S. Attorney Cameron McCree and the lottery’s current director, Bishop Woosley, who both asked her to impose prison time for Mazyck.
“The success of our business is totally dependent on the integrity of the game,” Woosley told the judge. He said it has “not been a good year for us,” and that “the real victims are the students.”
“As for the argument that the money was funneled back into the lottery,” he said, “the students get 21 cents of every dollar spent. About 70 percent goes to prizes.”
Woosley told the judge that people are hesitant to buy tickets if they feel the system isn’t secure.
“The effects of what Mr. Mazyck has done are more far-reaching than he thinks,” Woosley added. “We’ve probably lost some players, and we’ve probably lost some public confidence, that we’ll never get back.”
He also noted, “We’ve learned quite a few lessons from this,” and said he believed the best deterrent against other thefts would be to sentence Mazyck to prison time.
McCree told the judge that despite Mazyck’s claims, “There is no evidence that any of this money went back into the lottery.” Even if it did, he said, that “did not make the lottery whole. He was using the lottery’s money to purchase a chance at additional prizes.”
If Mazyck is truly a compulsive gambler, McCree argued, “it’s not severe enough that he has sought treatment for it.”
In addition to the prison term and restitution, Wright ordered Mazyck to undergo counseling for his gambling habit while in prison and serve two years’ probation after his release.
She said she believes he is remorseful and that he and his family have suffered as a result of his criminal actions.
Woosley, who was accompanied by two other lottery officials, said after the hearing that “we had hoped for the maximum under the sentencing guidelines, but we’re glad he got prison time.”
Asked if he expects Mazyck to pay back any of the money, Woosley said the lottery has an insurance policy that he expects to cover the losses.
“With a business like ours,” he said, “the integrity of the games essentially means everything.”
In the 2013 fiscal year, the lottery raised $89.9 million for college scholarships, a drop of $7.6 million from the previous fiscal year.