Lotto Firm Cleared in Probe but Second Report Is Pending

An investigation by the California Lottery turned up no evidence of wrongdoing by GTECH Corp., the company that runs the state’s Lotto 6/49 numbers game, according to a report released Monday by the lottery.

However, the state controller’s office, which helped the lottery in the investigation, issued a separate statement Monday, saying the lottery’s probe was incomplete.

Meanwhile, a man and woman who had bought a lotto ticket together stepped forward to claim their share of Saturday’s $40.7-million jackpot. Spencer Simpson, a Los Angeles trucking company owner, and Peggy Moore, a Los Angeles County social worker, were at dinner when they decided to buy their lotto ticket at a San Pedro liquor store, a lottery spokeswoman said.

Neither Simpson nor Moore could be reached Monday. Several of Moore’s co-workers said she was not at work Monday.

In all, seven people or groups of people correctly guessed the winning numbers and will receive $5.8 million, or yearly checks of $232,628. Other winners have not been identified.

The lottery investigation was prompted by two employees who alleged that GTECH under reported the amount of time that lotto terminals were not operating. GTECH must pay the lottery whenever terminals at retail outlets break down.

Lew E. Ritter, chief of lottery security, said in the report that there is “absolutely no basis for concern with respect to the integrity and security” of the lottery or GTECH.

However, the report may not end questions about the California State Lottery or GTECH, which has the $100-million contract to operate the lotto computer system. The state controller is nearing completion of an audit of the lottery’s oversight of GTECH.

Auditors from the controller’s office helped the lottery’s own auditors in the investigation and concurred that there was no evidence of wrongdoing by GTECH.

Sign of Disagreement

However, auditors in the controller’s office disagreed with some parts of the final report and refused to sign it. The lottery’s report made no mention of the controller.

“Our people don’t believe the lottery report adequately answers the question of whether the contract with GTECH was effectively monitored and whether appropriate damages were assessed,” said Edd Fong, spokesman for the controller.

A year ago, Emmitt Allison and Randy Troxel, lottery computer technicians based in Whittier, brought their concerns about GTECH to their superiors and later to auditors in the controller’s office.

Allison and Troxel estimated that GTECH owed the lottery as much as $180,000 for what they thought were unreported problems with lotto terminals. However, the investigation concluded that only an additional $2,820 could be levied against GTECH for problems with the terminals.

“GTECH reports, although sometimes missing data or inaccurate, do not appear to have been intentionally altered by GTECH staff,” the report said, referring to GTECH estimates of the amount of time that the terminals were not working.

When terminals work properly, they electronically read pencil marks on wager slips. Bets also can be hand-fed into the machines. Lottery officials contend a terminal is down--and GTECH must pay--when it does not automatically read the wager. GTECH claims a fine may be imposed only if a terminal will not accept a bet that is manually fed into it.

“Future resolution of this conflict may show that the (California State Lottery) has not been accurate in assessing damages under this section of the contract,” the report said.