Texas Lottery Commission Enforcement Division

9/8/2014
Texas District & County Attorneys Association
And Investigators
Fall 2014
 My name is Mario Valdez
 I am the south Texas coordinator/investigator for the
Enforcement Division and as such am a licensed peace
officer.
 I have worked for the Texas Lottery Commission since
May 1994
The Enforcement Division is committed to ensuring the
integrity and security of the
Texas Lottery Commission and its games
through the professional and thorough investigation of
Texas Lottery applicants; bingo and lottery licensees;
contract vendors and their employees; and allegations of
administrative and criminal violations of the laws and
rules governing bingo and lottery.
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Director
Executive Assistant
Intake Specialist
Investigative Program Support Specialist
3 Background Investigators
9 Field Investigators:
5 Commissioned Peace Officers
4 Investigators (Non-Commissioned)
2 Investigative teams
 North and South
 Share Austin Metro area
Cases
 About 2,000 cases per year
Includes an ever increasing number of Assist Cases
to local Law Enforcement Agencies on Burglaries,
Robberies, thefts and other types of cases. (ticket
tracking)
Investigate criminal and administrative
violations under:
 Texas Government Code
(Chapter 466 - the Lottery Act)
 Title 13, Chapter 2001 of the Texas Occupation Code
(Bingo Enabling Act)
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 Title 16, Part 9, Chapters 401 & 402 of
the Texas Administrative Code
 Applicable offenses in the Texas Penal
Code
The Enforcement Division is
tasked with conducting the
following types of investigations:
• Lottery Background Investigations
• Lottery Fraud Investigations
• Lottery Administrative Violations
• Charitable Bingo Background
Investigations
• Charitable Bingo Fraud Investigations
• Charitable Bingo Administrative
Violations
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•
Lottery Employee Candidates
•
Lottery Retailer Applicants
•
Primary Lottery Vendors
 Contracted Vendor Employees
 Lottery Operator Employees (with access
to Texas systems and working in Texas)
Typically generated as a result of:
 Complaints from general public related to
retailer misconduct
 Questionable prize claims
 Criminal violations
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Administrative violations
 Claiming Lottery Prize by Fraud
- § 466.308 Texas Govt. Code
 Forgery; Alteration of Ticket
- § 466.306 Texas Govt. Code
 Influencing Selection of Winner
- § 466.307 Texas Govt. Code
Enforcement Division also conducts:

Live Ticket Undercover Investigations for:
- Failure to Pay Prize
- Condition on Prize Redemption
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 Eligibility issues discovered during background
investigations of required entities or individuals under
the Bingo enabling act.
- § 2001.105 Texas Occupations Code
 Administrative and/or criminal violations
Charitable Bingo Investigations (cont.)
• Complaints from general public related to
licensee misconduct
• Requests for investigations based on
audit/inspection findings.
 Same winners or prize payment allegations
 Pull Tabs
 Conducting bingo outside licensed time
 Misreporting, diversion or theft of bingo funds
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Acts as liaison to outside law enforcement agencies
conducting investigations involving lottery or charitable
bingo activities.
Conducts internal investigations as directed by the
Executive Director.
 Bingo
 Lottery Operations
 Other Lottery Commission Divisions
Regular meetings are held to discuss
issues and address concerns.
Statutes & Rules
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 Governmental Record:
A) anything belonging to, received by, or kept
by government for information, including a
court record;
B) anything required by law to be kept by
others for information of government;
(a) A person commits an offense if he:
(1) knowingly makes a false entry in, or false
alteration of, a governmental record;
(2) makes, presents, or uses any record, document,
or thing with knowledge of its falsity and with
intent it be taken as a genuine governmental
record;
(3) intentionally destroys, conceals, removes, or
otherwise impairs the verity, legibility, or
availability of a governmental record;
§ 37.10. Tampering with Governmental
Record Offense cont.
(4) possesses, sells, or offers to sell a governmental
record or a blank governmental record form with
intent that it be used unlawfully;
(5) makes, presents, or uses a governmental record
with knowledge of its falsity; or
(6) possesses, sells, or offers to sell a governmental
record or a blank governmental record form with
knowledge that it was obtained unlawfully.
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(a) A person commits an offense if the person
intentionally or knowingly:
(1) claims a lottery prize or a share of a lottery prize
by means of fraud, deceit, or misrepresentation; or
(2) aids or agrees to aid another person or persons to
claim a lottery prize or a share of a lottery prize by
means of fraud, deceit, or misrepresentation.
(b) In this section, "claim" includes an attempt to
claim, without regard to whether the attempt is
successful.
(c) An offense under this section is a Class A
misdemeanor unless it is shown on the trial of the
offense that:
(1) the amount claimed is greater than $200 but
not more than $10,000, in which event the offense
is a felony of the third degree;
(2) the amount claimed is greater than $10,000, in
which event the offense is a felony of the second
degree; or
(3) the person has previously been convicted of an
offense under Section 466.306, 466.307, 466.309,
466.310, or this section, in which event the offense is
a felony of the third degree, unless the offense is
designated as a felony of the second degree under
Subdivision (2).
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(a) A person commits an offense if the person:
(1) induces another person to assign or transfer
a right to claim a prize;
(2) offers for sale the right to claim a prize; or
(3) offers, for compensation, to claim the prize
of another person.
(b) An offense under this section is a felony of the
third degree, unless it is shown on the trial of the
offense that the prize involved is greater than
$10,000, in which event the offense is a felony of
the second degree.
(a) A person commits an offense if the person
intentionally or knowingly makes a material and
false, incorrect, or deceptive statement to a
person conducting an investigation or
exercising discretion under this chapter or a
rule adopted under this chapter.
(b) In this section, "statement" includes:
(1) a written or oral statement; and
(2) a sworn or unsworn statement.
(c) An offense under this section is a Class A
misdemeanor.
(a) A person commits an offense of conspiracy if, with
intent that an offense under this chapter be
committed:
(1) the person agrees with one or more other
persons that they or one or more of them engage in
conduct that would constitute the offense; and
(2) one or more of the persons agreeing under
Subdivision (1) performs an overt act in pursuance
of the agreement.
(b) An agreement constituting a conspiracy may be
inferred from acts of the parties.
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(c) It is no defense to prosecution for conspiracy under this section
that:
(1) one or more of the coconspirators is not criminally responsible
for the object offense;
(2) one or more of the coconspirators has been acquitted, so long
as at least two coconspirators have not been acquitted;
(3) one or more of the coconspirators has not been prosecuted or
convicted, has been convicted of a different offense, or is immune
from prosecution;
(4) the actor belongs to a class of persons that by definition of the
object offense is legally incapable of committing the object offense
in an individual capacity; or
(5) the object offense was not actually committed.
(d) An offense under this section is one category lower than the most
serious offense under this chapter that is the object of the conspiracy,
and if the most serious offense under this chapter that is the object of
the conspiracy is a felony of the third degree, the offense is a Class A
misdemeanor.
(a) The commission may suspend or revoke any license issued under this
subchapter if the commission finds that any factor listed as grounds for
denial of a license under §401.153(b) of this title (relating to Qualifications
for License) or any factor listed in subsection (b) of this section apply to the
licensee. The commission shall inform the sales agent in writing of the
decision to suspend or revoke a license for any of these reasons. In addition,
in the event of a license suspension under this section, the director of the
Lottery Operations Division shall also inform the licensee of the terms
under which the suspended license may be reissued.
(b) Without limiting the commission's ability to consider factors listed in
§401.153(b) of this title as grounds for suspension or revocation of a license
issued under this subchapter, the commission may also suspend or revoke a
license for reasons including, but not limited to, any of the following:
(1) licensee engages in telecommunication or printed advertising that the
director determines to have been false, deceptive or misleading;
(2) licensee conditions redemption of a Lottery prize upon the
purchase of any other item or service;
(3) licensee imposes a restriction upon the redemption
of a Lottery prize not specifically authorized by the
director;
(4) licensee fails to follow instructions and procedures for the
conduct of any particular lottery game, lottery special event or
promotion;
(5) licensee and/or its employee(s) exhibit discourteous
treatment including, but not limited to, abusive
language toward customers, commission employees or
commission vendors;
(6) licensee fails to establish or maintain reasonable security
precautions with regard to the handling of lottery tickets and
other materials;
(7) licensee endangers the security and integrity of the lottery
games operated by the commission;
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(8) licensee violates any directive or instruction issued by the
director;
(9) licensee violates any express term or condition of its license not
specifically set forth in this subchapter;
(10) licensee incurs four notices of nonsufficient fund transfers or
non-transfer of funds within a 12-month period;
(11) licensee sells an instant ticket from a game that has closed after
the date designated for the end of the game;
(12) licensee fails to pay a valid prize in the amount specified on
the validation slip generated on the licensee's terminal or to pay the
authorized amount;
(13) licensee fails to pay a valid prize the licensee is required to pay;
(14) licensee refuses or fails to sell lottery tickets during all normal
business hours of the lottery retailer during all normal business
hours of the license during on-line game operating hours;
(15) licensee refuses to and/or fails to properly cancel a Pick 3 ticket;
(16) licensee fails to return an exchange ticket to a prize claimant
claiming a prize on a multi-draw ticket if an exchange ticket is produced
by the licensee's terminal;
(17) licensee fails to keep accurate and complete records of all tickets
from confirmed, active, and settled packs that have not sold;
(18) licensee fails to offer a minimum of two instant ticket games for
sale if two or more instant games are available from the Lottery;
(19) licensee fails to order or accept delivery of the required minimum
number of lottery tickets or fails or refuses to meet minimum sales
criteria;
(20) licensee fails to meet any requirement under §401.368 of this title
(relating to Instant Ticket Vending Machine), if the licensee has been
supplied with an ITVM by the commission;
(21) licensee fails to take readily achievable measures within the allowed
time period to comply with the barrier removal requirements regarding
ADA;
(22) licensee fails to prominently post license;
(23) licensee knowingly sells a ticket or pays a lottery prize to another
person who is:
(A) an officer or an employee of the commission;
(B) an officer, member, or employee of a lottery operator;
(C) an officer, member, or employee of a contractor or subcontractor
that is excluded by the terms of its contract from playing lottery games;
(D) the spouse, child, brother, sister, or parent of a person described by
subparagraph (A), (B) or (C) of this paragraph who resides within the
same household as that person;
(24) licensee intentionally or knowingly sells a ticket at a price the licensee
knows is greater than the price fixed by the executive director;
(25) licensee sells tickets issued to a licensed location at another location
that is not licensed;
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(26) licensee intentionally or knowingly sells a ticket by
extending credit or lends money to enable a person to buy a
ticket;
(27) licensee intentionally or knowingly sells a ticket to a
person that the licensee knows is younger than 18 years;
(28) licensee intentionally or knowingly sells a ticket and
accepts anything for payment not specifically allowed under
the State Lottery Act;
(29) licensee sells tickets over the telephone or via mail order
sales, establishes or promotes a group purchase or pooling
arrangement under which tickets are purchased on behalf of
the group or pool and any prize is divided among the members
of the group or pool, and the person intentionally or
knowingly:
(A) uses any part of the funds solicited or accepted for a
purpose other than purchasing tickets on behalf of the group
or pool; or
Each act has elements that must be proven
before criminal or administrative action can
be taken.
 The standard of proof for administrative
action is “Preponderance of Evidence”.
 The standard of proof for criminal
prosecution is “Beyond a Reasonable
Doubt”.
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Under penalty of law, I declare that to the best of
my knowledge and belief, the information entered
above is correct and correctly identifies the person
entitled to claim this prize; no other person is
entitled to claim any part of this prize; and the
recipient is not prohibited from purchasing a ticket
or claiming, collecting or receiving a lottery prize or
share of a prize. I understand it is a violation of law
for any person to intentionally or knowingly, claim
or aid another in claiming a lottery prize, or share
of a prize, by means of fraud, deceit, or
misrepresentation, or to knowingly alter or forge a
ticket.
(a) Definitions.
(1) Game of chance--A game or contest that awards a prize
and whose outcome is determined, at least in part, by the
element of chance or luck.
(2) Local law authority--The district attorney's office or
county attorney's office within a particular jurisdiction, or a
court of competent jurisdiction.
(b) Except as otherwise provided in subsection (c) of this
section, a person may not conduct or allow a game of chance
at a bingo premises during a bingo occasion at the premises.
(c) Notwithstanding subsection (b) of this section, the
following games of chance may be conducted or allowed
during a bingo occasion:
(1) charitable bingo conducted under Chapter 2001 of
the Occupations Code;
(2) door prize game conducted under §2001.420(c) of
the Occupations Code;
(3) charitable raffle conducted under Chapter 2002 of
the Occupations Code; and
(4) amusement machines that are not gambling devices
as defined in §47.01 of the Penal Code.
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(d) The Charitable Bingo Operations Division will rely on a
local law authority in the relevant jurisdiction to determine
whether any particular device, including a device commonly
referred to as a sweepstakes machine, is a gambling device
before the Division pursues a violation of subsection (c)(4) of
this section. Under this subsection, local law authority
determinations may include a final criminal disposition,
charging instrument (such as an indictment), or other
document filed with or issued by a court of competent
jurisdiction indicating that the devices at issue qualify as
gambling devices.
(e) The Commission may notify the district attorney's office
or county attorney's office within a particular jurisdiction of
the existence of any devices in their jurisdiction to which
subsection (d) of this section may apply.
(f) A game of chance, other than bingo conducted under
Chapter 2001 of the Occupations Code, a charitable
raffle conducted under Chapter 2002 of the Occupations
Code and a door prize game conducted under
§2001.420(c) of the Occupations Code, may not award
bingo equipment, as defined in §2001.002(5) of the
Occupations Code, or entry into a bingo game as a prize.
(g) A licensed authorized organization must adequately
document in the bingo occasion records all bingo
equipment or entries into a bingo game awarded as
prizes for a bingo game, charitable raffle, or door prize
game under subsection (f) of this section.
Sec. 2001.416. OTHER GAMES. (a) A game of chance other
than bingo or a raffle conducted under Chapter 2002 may not
be conducted or allowed during a bingo occasion.
(b) A person authorized to conduct a raffle under this section
must be a member of a licensed authorized organization as
provided by Section 2001.411.
(c) The commission shall adopt rules for the implementation
of this section.
(d) This section does not prohibit the exhibition and play of
an amusement machine that is not a gambling device as
defined by Section 47.01, Penal Code.
Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.
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Sec. 2001.420. PRIZES.
(a) A bingo prize may not have a value of more than $750 for a single
game.
(b) A person may not offer or award on a single bingo occasion
prizes with an aggregate value of more than $2,500 for all bingo
games other than:
(1) pull-tab bingo; or
(2) bingo games that award individual prizes of $50 or less.
(c) A licensed authorized organization or other person may not
award or offer to award a door prize with a value of more than $250.
Acts 1999, 76th Leg., chap. 388, Sec. 1, eff. Sept. 1, 1999.
Amended by: Acts 2013, 83rd Leg., R.S., Ch. 634 (H.B. 394), Sec. 1,
eff. June 14, 2013.
Division Director
Ed Rogers, 512-344-5389
Executive Assistant
Viola Ramirez, 512-344- 5464
Intake Specialist
Brenda Carrales, 512-344-5229
Inv. Program Support Specialist
Stephen Kuhns, 512-344-5397
Background Investigative Team
Michael Jones, 512-344-5292
Steve Bilbo, 512-344-5441
Albert Sanchez, 512-344-5345
North Investigative Team
South Investigative Team
Tom Hanson (Coordinator), 512-344-5457
Mario Valdez (Coordinator), 512-344-5250
Char Brannon, 512-344-5341
Tammy Boddy, 512-344-5495
John Graham, 512-344-5442
Juan Gusme, 512-344-5478
A J Kozak, 512-344-5455
Daniel Heinz, 512-344-5460
Marcie Woods-Mendoza, 512-344-5203
Questions
and
Discussion
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