The state lottery director said Monday he is confident no other employees were involved in a scheme by the lottery’s former deputy director of security to steal lottery prize money, though he said he did not know whether any other employees might face disciplinary action.
Bishop Woosley spoke to reporters following a meeting of the state Lottery Commission in which commissioners met in executive session for an hour and 15 minutes to discuss disciplinary issues but took no related action.
“Nothing within what we found and the federal investigation found showed that anyone else was involved,” Woosley said Monday, three days after Remmele Mazyck, who served as the lottery’s deputy director of security from July 2009 to November 2012, pleaded guilty to federal charges of wire fraud and money laundering.
Asked whether other employees would be disciplined, Woosley said, “I am going to wait until I see what is in the federal investigation. … I’m going to wait and look at that and see what they found and see what Mr. Mazyck said in any of those documents and make a decision based on that.”
Mazyck admitted to cashing 22,171 lottery tickets for a total of $478,073 between November 2009 and last October. Lottery officials said he had access to tickets that normally were given away at promotional events and was cashing them as if he had purchased them. After the scheme was discovered, the lottery discontinued promotional tickets.
“The (lack of) duplication, to where there were not two people in charge, two people who were notified, is a shortfall for us, and that’s mainly how it went on for so long,” Woosley told reporters Monday.
He said Mazyck, who was hired by former Lottery Director Ernie Passailaigue, developed the security policies that allowed him to carry out his scheme. Those and all other security policies have been reviewed in recent months, he said.
Woosley said he expects to hire a new deputy director of security “probably fairly soon.”
“The new deputy, I think we will probably change his role and there’ll probably be more duplication of efforts and cross-divisional checks and balances that we’ll install once that person gets here,” he said.
Aside from discontinuing promotional tickets and changing the role of the deputy director of security, no other policy changes have been made or are believed to be needed, Woosley said.
Mazyck was placed on administrative leave Oct. 26 and fired Nov. 14. At the time he was fired, his annual salary was $76,500.
He faces up to 20 years in prison and a fine of up to $250,000 on the wire fraud conviction and up to 10 years and a $250,000 fine on the money laundering conviction. A sentencing date has not yet been set.
Also Monday, Woosley told the commission that the lottery’s net proceeds of $89.9 million for the fiscal year that ended June 30 — down from $97.5 million the previous year — reflected a decline in sales of scratch-off tickets.
Scratch-off sales totaled $274 million in fiscal year 2012 and $250 million in fiscal year 2013.
“I think the economy has a lot to do with it. When people have less discretionary money, they don’t buy items such as lottery tickets and other luxury items,” he said.
Woosley also said that interest in state lotteries typically diminishes after the first three years or so. Arkansas’ lottery launched in 2009.
“I think we’re following along the normal lifeline of a lottery. You go down and you incrementally build back up and get to a level where you can sustain,” he said.