Skilled counterfeiters employing sophisticated cut-and-paste techniques are creating fake winning tickets for Maryland's instant lotteries. And the agents who cash them are the losers.
"Lottery agents around the state have been experiencing a rash of altered Scratch-Off tickets purported to be $25 winners," the Maryland State Lottery said in a newsletter sent to agents this week. "The alterations are . . . very good work."
Lottery officials say they expect a certain amount of such activity, especially as the number of Scratch-Off games increases. Security officials "stay right on top of these matters," said Carroll Hynson, a lottery spokesman.
Combining portions of two or more losing tickets, the counterfeiters are producing bogus winners for amounts less than $50 because agents must verify larger payouts through the lottery agency computer.
But lottery agents say even small losses are a big problem.
Sellers get a 5 percent commission on sales. They aren't reimbursed if they cash phony tickets. An agent who pays $25 on a phony winner has to sell 500 more instant-game tickets at $1 each to make up the loss.
The owner of a Glen Burnie convenience store, who asked not to be named, said he may stop selling instant lottery tickets because of the fraud and because of the labor required to keep up with the growing number of Scratch-Off games.
Employees in his store mistakenly cashed two bogus $25 tickets in one week recently.
"They're so good, that at a quick glance, you can't tell" a ticket is bogus, the store owner said. "We're losing money."
The rip-off artists "get people who aren't experienced" at checking the tickets, said Doug McEvoy, manager of a 7-Eleven on Back River Neck Road in Essex.
Even an experienced employee can be duped if he or she is particularly busy, he said.
Mr. Hynson said the agency always has had sporadic fraud reports, but they have increased lately as the agency has sponsored more instant games.
A half-dozen people have been prosecuted for trying to cash altered Scratch-Off tickets in the past year, other lottery officials said.
The penalty is a fine of up to $2,500 and three years in prison.
Ticket agents, who are offering up to eight Scratch-Off games simultaneously, say they're telling employees to be more careful in inspecting winning tickets. Some are demanding that people trying to cash a ticket for an amount of $10 or more supply a driver's license.
"We are trying to protect ourselves," said Jimmy Koutsantonis, owner of Penny's Carryout in Dundalk.
Mr. Koutsantonis said he, too, mistakingly accepted two bogus tickets in the past several weeks.
Sellers get printed invoices to help them verify the tickets they sell, Mr. Hynson said.
If they have any doubts, they can call the lottery agency to verify any winner or demand that customers cash their tickets at lottery headquarters.
Agents also can check codes on the tickets that appear after the ticket has been scratched off, but he acknowledged that the codes can be counterfeited.
Mr. Hynson said the lottery agency plans to supply electronic bar code scanners to all ticket sellers by the end of the year.
The scanners can verify any ticket, he said. "In the very near future, we'll have a system we know will eliminate a lot of these problems," Mr. Hynson said.
Mr. Hynson could not say how much the scanner system would cost, because the lottery agency still is negotiating with vendors.
Scanners have been "very effective" in Massachusetts, said David R. Ellis, a spokesman for that state's lottery agency.
Ticket agents in Massachusetts offer up to a dozen instant games. The scanners have been in place there since the fall of 1989, he said.
Mr. Hynson said that until the scanners are in place in Maryland, the responsibility for checking tickets manually lies with the sellers.
"We want to make sure that [sellers] don't make hasty decisions," he said.
Apparently, more than one group of people is responsible for the fraud, Mr. Hynson said.
"From time to time, we'll get a rash of them in a neighborhood," said Gary Grant, the lottery agency's security chief.
He said that during some weeks, the agency receives reports of up to 10 bogus tickets being passed.
Considering that thousands of Scratch-Off tickets are being sold during a given week, Mr. Hynson said, the fraud is not a "major problem."
But ticket sellers note that the lottery agency gets its money no matter what.
"It's out of my pocket," said Mr. Koutsantonis, the Dundalk carryout owner.