April 20, 2021
An Ocean County, New Jersey man today admitted operating an illegal lottery and failing to pay more than $65,000 in federal taxes on his earnings from the scheme, Acting U.S. Attorney Rachael A. Honig announced.
Edward O’Neill, 54, of Beachwood, New Jersey, pleaded guilty by videoconference before U.S. District Judge Brian R. Martinotti to an information charging him with one count of managing an illegal gambling business and one count of subscribing to a false tax return.
According to documents filed in this case and statements made in court:
Between 2014 and 2019, O’Neill managed an illegal lottery in Hudson County that was based on the New Jersey Lottery Commission’s Pick Six. Participants in the illegal lottery paid a $20 entry fee and selected six numbers between 1 and 49. The first participant in the illegal lottery to have all six of their numbers selected in the official Pick Six drawing won a cash prize. For each drawing of the illegal lottery, O’Neill collected entry fees and participants’ numbers and entered the numbers into ledgers, which included identifying information for each participant and the numbers each participant had selected. O’Neill monitored the numbers selected in the official Pick Six and, when there was a winner of the illegal lottery, caused the winning participant to be paid in cash.
According to the ledgers, each drawing of the illegal lottery included up to 8,000 participants and the cash prize for each drawing often exceeded $100,000. In exchange for operating and managing the illegal lottery, O’Neill kept for himself 10 percent of the winnings from each drawing. O’Neill admitted that he failed to account for approximately $250,000 in cash winnings from the illegal lottery on tax returns he filed with the IRS between 2014 and 2018, causing him to underpay his federal incomes taxes by $65,674.
The gambling charge to which O’Neill pleaded guilty carries a maximum penalty of five years in prison, while the subscribing to a false federal income tax return count is punishable by up to three years in prison. Both charges carry a potential fine of $250,000 or twice the gross gain or loss from the offenses, whichever is greater. Sentencing is scheduled for Aug. 25, 2021.
Acting U.S. Attorney Honig credited special agents of the U.S. Attorney’s Office, under the direction of Supervisory Special Agent Thomas Mahoney; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez; and special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Sean Farrell of the U.S. Attorney’s Office’s Special Prosecutions Division.
21-142
Defense counsel: Jeffrey S. Chiesa Esq. and Brian P. O’Neill Esq., West Orange, New Jersey
Photo by Ru016bdolfs Klintsons on Pexels.com