Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SUNDAY, March 15, 1992                   TAG: 9203150148
DATELINE:                                 LENGTH: Medium


As early as October 1989, the International Lotto Fund was scoping out American lotteries to plunder.

In the next two years, the Melbourne, Australia, syndicate's agents cast a wide net, visiting or contacting officials in cities as far-flung as Montreal, Boston, Miami, Phoenix and Norfolk.

Their mission: to identify and capture a multimillion-dollar jackpot by buying all the number combinations in a lottery.

When the International Lotto Fund finally hit pay dirt Feb. 15 and won Virginia's $27 million jackpot, it was no fluke.

It was the result of years of preparation that included trial runs in Massachusetts and a near go-ahead to corner the Arizona lottery in 1990, Australian and U.S. officials believe.

An Australian document shows that Pacific Financial Resources, the consulting firm linked with the syndicate, recently employed an agent in Miami.

Florida lottery officials, however, said they've seen no activity by the syndicate in their state.

What emerges is a portrait of a syndicate willing to spend a lot of money and dispatch its agents across the United States to monitor lotteries and decide whether the odds and jackpots make the gamble worthwhile.

In October 1989, an employee of Pacific Financial Resources, which is headed by lotteries guru Stefan Mandel, wrote the International Association of State Lotteries in Montreal, Quebec.

The employee, Neill Patterson, wanted a list of lotteries with jackpots exceeding $30 million. He said he had been referred to the association by a lottery official in France.

"I would like to know," Patterson wrote, "if you could send or fax me some information including a list of the lotteries, the number of times they exceed $40 million [Australian], the amount the first prize reached, the number of winners and the date they last exceeded $40 million."

The association's general secretary replied: "The only instances that we know of whereby a single ticket could potentially win over $40 million have occurred during the past few years with the United States lotto games."

In October 1989, Paul Kelly, the tough-talking security director at the Massachusetts lottery in Braintree, was contacted by his sources in the retail community.

The "Mass Millions" jackpot, whose odds of being won are 1 in 9 million, was swelling to $37 million.

At least two trial runs are believed to have been made in Boston - experiments to see just how fast lottery play slips could be processed in the United States, Australian officials said.

The retailers told Kelly that a man had asked them to process several thousand lottery play slips, but Kelly was unable to track him down.

"It was like jabbing in the wind," Kelly said. "We knew it was somebody out there, but we didn't know who it was."

In the second week of December 1991, the mystery man returned. Kelly, through his sources, identified the man as Anithalee Alex - the Illinois man who ran the syndicate's Virginia operation.

By then, Alex had already contacted officials at Farm Fresh and other retail chains in Norfolk, asking them whether he could buy several million lottery tickets.

The Massachusetts jackpot had risen to $27 million by January 1992. Four or five retailers confirmed they did business with Alex, said Kelly, the lottery security chief. One retailer told Kelly that Alex had put down at least $100,000 worth of play slips to run through the store's machines.

The payment came not in cashier's checks, as in Norfolk, but as "cash on the barrel," Kelly said.

Then Kelly got Alex on the phone.

"He said it was just an investment," Kelly said. "He had investors and they would split the shares if the jackpot was hit. . . I told him, `We are concerned about what you're doing.' " Kelly hasn't heard from Alex since.

The Arizona lottery, too, was watched by Alex. In late August 1990, the Arizona jackpot, whose odds of being won are 1 in 5.1 million, had reached $11 million.

On Aug. 29, 1990, Alex phoned the Circle K convenience-store chain in Phoenix asking how to buy 2 million lottery tickets from the stores.

But the jackpot was won before it reached $15 million, and Kiyler believes that the International Lotto Fund may have halted its efforts in Phoenix at that point.

The International Lotto Fund was established in 1989 by Mandel, who had won at least two Australian lotteries by covering all the numbers.

He set up the fund after several Australian laws were changed to bar syndicates from buying large blocks of lottery tickets. The fund, with 2,500 investors, bloomed to $7.6 million.

In Virginia, the syndicate bought at least 5.6 million tickets in trying to cover all 7.1 million number combinations. Next week it will pick up its first check of just over $1 million in Richmond.

 by CNB