Largest SC lottery winner lost millions to NY attorney
On the morning after she became a multi-millionaire, a South Carolina woman drove by the KC Mart No. 47 in Simpsonville where she bought her lottery ticket, to see if anyone was there, just in case she had made a mistake and didn’t really win.
It was the largest Mega Millions jackpot to be won by a single ticket — more than $1.5 billion — and she had seen the numbers reported on television.
“If no one was there, I would say, ‘okay, well this was a disaster, we made a mistake,’ and I’d drive home and all would be good. But as we went by the convenience store, there was every media — there was helicopters, there was every piece of media, there was locals, you know, national. I so badly wanted to get out of there, I wanted to go under the seat, I became anxious.”
That was some of her testimony in a trial earlier this year in which her lawyer, Jason Kurland, the self proclaimed “lottery lawyer,” was charged with taking money from some of his clients — in her case more than $80 million.
The South Carolina woman has never been identified and was allowed to testify using the pseudonym, Beth Smith.
Her testimony offers a glimpse into her overnight transformation, from insurance underwriter with only a 401K and a checking account to a wealthy retiree with a net worth of $600 million, the amount she received after taxes.
Her story also provides a cautionary tale for those who come into large amounts of money unexpectedly, who trust professionals to do their jobs without a lot of oversight.
The following narrative is taken from Beth Smith’s testimony against Kurland.
Joy mixed with anxiety
When she saw the numbers on her lottery ticket matched all six numbers for the Oct. 23, 2018 drawing, she felt a range of emotions — “astonishment, disbelief, joy, anxiety.”
It was a great blessing, she thought, but also of great concern. She did not want to be someone in the public eye. In her late 50s, she and her husband, a lawyer, had a comfortable life. They had been married 36 years and had grown children. She didn’t want riches to change anything.
Even at the convenience store the next morning, she felt people were looking at her, somehow, they just knew who she was. She worried about her safety and that of her family.
Anonymity was of utmost importance.
They stashed the ticket in a safety deposit box until they decided what to do.
“We considered attorneys. We considered financial advisors. We considered accountants. We considered, you know, investment firms; that kind of thing,” she said.
They settled on an attorney because they knew who to bring in for other advice, plus an attorney would be bound to keep their confidences.
They saw Kurland, a New York attorney, on television talking about winning the lottery, their lottery. He had previously represented other big lottery winners including wins of $336.4 million in Rhode Island and $254.2 million in Connecticut.
In his late 40s, he lived on Long Island with his wife and soccer-playing children and worked for the law firm Rivkin Radler.
She thought the lottery lawyer name gimmicky, but then saw him on the news.
“He was on, you know, the morning shows and the like, and it looked like he certainly knew about lottery — he had a specialty in lottery winners. And, you know, we looked online and he seemed very capable,” Smith said.
Her husband called Kurland from a burner phone in December 2018. They didn’t want him to know their names. They met in Las Vegas shortly afterward.
They needed Kurland to help collect the prize, distribute money to charity and most importantly keep their names out of the news. Over the next year and a half, his involvement in their financial lives would grow well beyond that.
Collecting the prize
On March 4, 2019, five months after winning, the Smiths — the husband is called Steve in the trial transcript — met Kurland in Columbia (the precise location was not identified in court). Security from the South Carolina Lottery Commission picked them up and drove them to the lottery office on South Main, two blocks from the State House.
They pulled into an underground garage where security cameras had been turned off. Windows covered. It was a Sunday. Several lottery officials attended the meeting.
The Smiths turned in their ticket, which brought them $878 million before taxes. Kurland was paid a flat fee of $200,000.
Then a few days later, Kurland informed the media. He said the woman was from South Carolina, visiting Greenville and chose to take a “scenic drive during some down time,” the Greenville News reported.
On a whim, she stopped at the KC Mart.
She had decided to give money to the City of Simpsonville Arts Center, Ronald McDonald House of Charities of Columbia, One SC Fund – for Hurricane Florence Relief, In The Middle of Columbia and the American Red Cross Alabama Region – Tornado Relief Fund.
Kurland did not say how much went to each.
Kurland had opened an account at Bank Leumi USA, headquartered in New York City, to be distributed to four other large American banks — $100 million to two and $50 million to two others. In-house money managers would handle investments.
“We were very adamant that we wanted this to be invested in a very conservative way because my husband and I believed this was — this blessing was going to be provided — to my family and generate — and we would have it generationally. So, we didn’t need to take any, any risk in doing that,” she said.
The accounts were set up in Kurland’s name to protect their anonymity.
“He has access to it. We did not. He set it up as if it was, basically, his account,” she said.
They did not get statements or balance information.
All information would come from Kurland.
The Smiths agreed to pay him $50,000 a month for his services going forward.
Included in those services was arranging for Smith’s husband to go to the Master’s and her sister and brother-in-law to go to the Kentucky Derby. At one point Kurland sent Steve Smith an autographed photo of Daniel “Rudy” Ruettiger, whose story of getting to play football at Notre Dame was made into a movie.
The deals come in
Two days after claiming the money, Kurland brought two investments to the Smiths, JBMML and Cheddar Capital. Both lend money to small businesses. The Smiths would invest $20 million in JBMML and $10 million in Cheddar at an interest rate of 9%.
The interest in turn would go to a family fund called Cedar Ridge Partnership to be distributed as monthly income of $12,500 apiece to 10 family members.
The next month, Kurland offered a deal he said he and other lottery winners had done well with — a diamond merchant, who would pay $2 million on a $12.6 million investment in six months.
Then in May, Kurland suggested they invest in thoroughbred race horses. One million dollars would get them three horses and feed and train them for a year.
In March 2020, at Kurland’s suggestion, they invested $19.5 million in a company that was hoping to provide PPE to the State of California.
The Smiths rocked along. They bought a new house in South Carolina, another in another state and a place for a family member outside the United States. They bought a hotel. Tens of millions in real estate transactions.
Then cracks started to show.
“The payments (to family members) were very irregular. Sometimes it would go direct from the company to my family members, Cheddar Capital and JBMML. They were not the amounts of monies that we were, you know, guaranteed in these documents and it was very concerning. Terribly concerning.”
She learned the diamond merchant Greg Altieri was being investigated after she was contacted by the FBI. Kurland reassured her. All was well. The government described the merchant’s business as a Ponzi scheme when he was arrested.
Then, Kurland himself and three others who were in on the deals involving the Smiths and two other lottery winners were arrested.
That was August 2020.
The scramble is on
Smith said she had no idea initially how to gain access to her money.
“I didn’t even know who the wealth investors — the wealth advisors were,” she said. “You don’t just call the 800 number and, you know, be talking to someone.”
It was a long, tedious process, and she worried that if Kurland was out of jail he still had complete control over her money.
“I wanted, you know, a stop put to that,” she said..
She had to get a certified copy of the lottery ticket. The commissioner drove it to her house.
“We were very grateful,” she said.
Each bank had its own requirement for proving the money was hers.
Smith said there were many bits of information Kurland never shared, such as he earned a 1% finders fee on some investments and had an interest in JBMML and Cheddar. He bought two horses, not three. And worst of all, took $19.5 million from her account without permission.
Asked in court why Kurland took the money, she said, “The only thing I can think of is theft.”
She said she had no idea where the money went.
Bloomberg News, in a story published before Kurland’s trial, exposes the twists and turns of Kurland’s life from a Hofstra Law School graduate working on small-time real estate deals to becoming involved with people on the margins of organized crime.
“Kurland and his associates were accused of siphoning lottery winnings to pay for boats, luxury cars, country club memberships, and other clichés. Oh, and one of the crew threatened to murder the family of a man who turned out, inconveniently, to be a federal informant,” the magazine said.
The magazine said prosecutors intended to allege that Kurland, (Frank) Smookler, and (Frank) Russo used lottery winnings as a “slush fund” for personal expenses such as a Range Rover and a shopping spree at Dick’s Sporting Goods.
In July, a Brooklyn, New York, jury unanimously convicted Kurland of five counts of wire fraud, honest services wire fraud and money laundering, according to court documents.
The government estimated Kurland caused losses to three lottery winners of more than $100 million.
Kurland pleaded not guilty, saying he was deceived by others who were also charged in the scheme. Two of them, Francis “Frank” Smookler and Frangesco “Frank” Russo testified against Kurland, both of whom previously pleaded guilty to wire fraud, money laundering and extortion and are pending sentencing.
Also charged in the case was Christopher Chierchio, who Bloomberg described as owning “a Staten Island plumbing business and has been identified in the New York tabloids as a Genovese crime-family soldier.” He pleaded guilty to fraud and money laundering and is pending sentencing.
Federal prosecutors had tapes of the co-conspirators talking about their scheme, court records said.
Diamond merchant Altieri pleaded guilty in 2020 to wire fraud.
In the meantime, Beth and Steve Smith are left to wonder why.
“Do you think if you just asked better questions in this case, that these things wouldn’t have happened?” the prosecutor asked Beth Smith.
“Oh, I don’t believe that at all. I think they would have happened, regardless of the number of questions I asked.”
This story was originally published August 13, 2022 5:00 AM.