Ocean County Man Operated Illegal 'Pick-Six' Lottery In NJ

NEWARK, NJ — A Beachwood man pleaded guilty to 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 said Tuesday in a statement.

Edward O’Neill, 54, of Beachwood pleaded guilty to one count of managing an illegal lottery and one count of subscribing to a false tax return.

According to documents and statements made in court, O’Neill managed an illegal lottery in Hudson County between 2014 and 2019.

The illegal lottery was based on the New Jersey Lottery Commission’s Pick Six where participants paid a $20 entry fee and selected six numbers between 1 and 49. Then the first person to have all six of their numbers selected in the official Pick Six drawing won a cash prize, Honig said.

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, according to Honig.

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, Honig said.

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, authorities found that O’Neill kept 10 percent of the winnings from each drawing for himself.

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 income taxes by $65,674, according to Honig.

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.

O’Neill’s sentencing is scheduled for Aug. 25, 2021.