Iowa Lottery officials warned Monday they will deny payment of a multimillion-dollar jackpot unless the New York attorney who turned in the winning ticket under mysterious circumstances gives them key details by Friday.
The lottery sent Crawford Shaw of Bedford, N.Y., a letter, saying investigators need the identities and contact information of the person who bought the ticket at a Des Moines gas station in December 2010 and anyone else who possessed it between then and its Dec. 29 arrival at agency headquarters.
Rather than claiming the prize in person, as has always been done, Shaw signed the ticket on behalf of a trust and shipped it by FedEx to a Des Moines law firm he retained on Dec. 29. After going unclaimed for a year, his lawyers stunned lottery officials when they produced the ticket less than two hours before it expired.
Shaw signed the ticket on behalf of Hexham Investments Trust, but lottery officials said Monday that he misspelled the name of the trust by leaving out the second "h." During a meeting last week with lottery investigators, Shaw refused to answer their questions about the ticket's chain of custody.
Without that information by 3 p.m. Friday, Iowa Lottery CEO Terry Rich said he would deny payment of the jackpot _ worth either $7.5 million cash or $10.3 million spread over 25 years after taxes _ even though the ticket is the winner.
"This is a classic example of what a prohibited player may do to go about claiming a prize," Rich said at a news conference in Des Moines, referring to an apparent attempt to hide the identity of the winner or winners. "We're saying, `show us the story and we'll show you the money.' "
Shaw's attorney, Julie Johnson McLean, said she forwarded the lottery's letter to Shaw but wasn't sure whether he would meet Friday's deadline. She said Shaw, 76, has no financial interest in the ticket and was only representing the trust.
"I believe it's a valid claim," McLean said. "Given the media inquiries, I think it seems natural that someone may be hesitant to seek all the publicity that seems to be generated."
Iowa law says prohibited players include employees and contractors of the lottery, their relatives and anyone under 21. Rich said the pool could also include anyone who illegally possessed the ticket. He noted the Lottery has received several claims the ticket was stolen.
Rich said he is not sure of the legal significance of the misspelling of Hexham, but that could be addressed if Shaw goes to court to try to collect the prize. McLean called that an inadvertent error that should have no effect.
Lottery officials earlier Monday briefed representatives of the Iowa Division of Criminal Investigation and the Iowa attorney general's office as new details emerged about Shaw's past business dealings. Rich said both agencies were assisting the lottery.
Rich said Shaw's history, which includes lawsuits alleging fraud in Delaware and Texas, could be unrelated to the Iowa lottery ticket, but investigators were looking into it.
Records show Shaw played at least a minor role in the collapse of Industrial Enterprises of America, a chemical company that was looted and bankrupted in 2009 by a stock manipulation scheme. Shaw helped found the company after taking control of a Houston-based shell corporation, serving as its CEO from 2004 to 2005.
Shaw told investors the company's stock was "grossly undervalued" in 2005 and promised revenue was skyrocketing, corporate filings show. But he abruptly stepped down in October 2005, and was replaced by the company's chief financial officer, John Mazzuto.
Mazzuto pleaded guilty last year to grand larceny and other charges for plundering the company. Prosecutors say he and another company executive, James Margulies, issued millions of shares of a type of stock that can legally be given only to employees as part of a benefit plan, and funneled the stock to themselves, relatives and associates. The stock was sold, and the money was channeled back to Mazzuto and Margulies. They improperly recorded it as revenue, which boosted the company's books, inflated its stock price and lured investors.
A lawsuit filed in federal bankruptcy court in Delaware alleges Shaw was compensated with $2.3 million worth of the improper shares and is seeking to recoup that money. Investors, which included an Ohio teachers' pension fund and the Methodist Church, lost more than $100 million when the company collapsed.
In 2009, Texas doctor Howard Nunn filed a lawsuit saying Shaw refused to issue him $25,000 worth of shares of Industrial Enterprises he bought in 2005. Shaw eventually agreed to refund his money but only paid back $5,000, the lawsuit claimed.
Shaw agreed to pay Nunn $25,000 last March to avoid trial, but records show he has since refused to satisfy the judgment or respond to questions about his financial assets after claiming he doesn't have enough to pay. A judge in September sanctioned him $750.
"He has made some representations to my client that he intends to pay the judgment. It's premised on something happening _ we don't know what _ and him suddenly having money to pay," said Nunn's lawyer, Ty Chapman. "I believe he told my client it didn't have anything to do with the Iowa Lottery deal."
Chapman said he tried to serve Shaw numerous times with court orders at the Bedford, N.Y., address where relatives say he lives and has been unsuccessful. Shaw gave Lottery investigators a Texas driver's license when he met with them last week, and Rich said the agency didn't know his whereabouts.
The questions about Shaw are no surprise to Florida interior designer Elizabeth Calomiris, Mazzuto's ex-wife. She said she knew Shaw when she was married to Mazzuto. After Shaw left Industrial Enterprises, she said Shaw begged her to give him damaging personal and business information she had on her ex-husband and came to her home to get it.
She said Shaw used the information as leverage to obtain a settlement in which he was paid the $2.3 million in company shares, and she now regrets helping him.
"Crawford Shaw, he's just as crooked as can be. I wouldn't trust anything that he's said," Calomiris said. "He lied to me a lot. He'll say anything to get what he wants."