Criminal probe considered in Iowa jackpot mystery -

Criminal probe considered in Iowa jackpot mystery

Posted: Updated:
By KMOV Web Producer By KMOV Web Producer

 IOWA CITY, Iowa (AP) -- Investigators met Monday to determine whether to launch a criminal probe into a mysterious Iowa Lottery jackpot claim, as records show the man who signed the winning ticket has a history of questionable business dealings.

The checkered past of Crawford Shaw -- and questions swirling around every aspect of his story, including where he lives -- is complicating the lottery's investigation into whether to pay the Hot Lotto jackpot worth $7.5 million cash or $10.3 million over 25 years. They say it is by far the strangest case in their 26-year history, and they appear no closer to solving the mystery four weeks after the ticket surfaced minutes before the deadline after going unclaimed for a year.

Rather than claiming the prize in person, as is usually the case, Shaw shipped the ticket by FedEx to a Des Moines law firm he retained on Dec. 29, and its lawyers redeemed the ticket at Iowa Lottery headquarters less than two hours before it was to expire. Shaw signed the ticket on behalf of Hexam Investments Trust. But thus far, Shaw has refused to say how he wound up with the ticket, who bought it at a Des Moines gas station a year earlier, where it was in the meantime and who would actually get the jackpot money.

Shaw did provide a copy of the trust agreement to lottery officials during a meeting last week, but Iowa Lottery spokeswoman Mary Neubauer said it doesn't contain key information. The agency says it won't pay the jackpot until it is satisfied that the ticket was legally possessed and claimed. Shaw expressed uncertainty about whether the money would be paid during an interview with The Associated Press last week, but he didn't return messages seeking comment Friday or Monday.

Lottery officials planned a news conference Monday afternoon after meeting with representatives of the Iowa Division of Criminal Investigation and the Iowa attorney general's office to provide an update about the investigation. Dave Button, who leads DCI's gaming bureau, said his agency would ask whether a crime has been committed or was attempted and determine after the meeting whether to investigate further.

Button said Shaw's business dealings, which include lawsuits alleging fraud in Delaware and Texas, could be unrelated to the ticket, but "would heighten your sense of awareness, for sure."

Court and business records reviewed by the AP Press show that Shaw played at least a minor role in the spectacular 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" and, in 2005, promised revenue was skyrocketing, corporate disclosure 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 he reached a deal in 2005 with Shaw to buy $25,000 of Industrial Enterprises stock but Shaw refused to issue the shares. Shaw eventually agreed to refund his money but only paid back $5,000, the lawsuit claimed.

Shaw agreed to pay Nunn $25,000 in March 2011 to avoid a trial, but court records show he has since refused to pay or respond to discovery questions about his assets after claiming he doesn't have enough financial resources. A judge in September sanctioned him $750, but Nunn's lawyer has been unable to find Shaw to serve him with paperwork that orders him to appear in court.

  "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 has given that address to lottery officials, but gave them a Texas driver's license when he met with them last week, Neubauer said.

The questions about Shaw's actions are no surprise to Florida interior designer Elizabeth Calomiris, Mazzuto's ex-wife. She said she knew Shaw well when she was married to Mazzuto between 1997 and 2004. After Shaw was ousted from 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 in Florida to get it.

She said Shaw used the information as leverage to obtain a legal 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."

Powered by Frankly