The self-proclaimed “Lottery Lawyer” has been charged in a scheme in which tens of millions of dollars was swindled from lottery winners, federal prosecutors said Tuesday.
New York lawyer Jason Kurland, 46, is accused of gaining the trust of his clients, some of whom won big in Mega Millions and Powerball, and steering them to invest in businesses controlled by three other people who are also charged. Kurland is alleged to have gotten kickbacks in the scheme.
More than $107 million was invested in the scheme, and of that, more than $80 million was either stolen or lost, prosecutors said. The indictment was unsealed Tuesday in federal court in Brooklyn.
Kurland “allowed co-conspirators to pillage his clients’ bank accounts for their own enrichment,” acting U.S. Attorney Seth DuCharme said in a statement.
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Christopher Chierchio, 52, who is described in a court document as a soldier in the Genovese crime family; former securities broker Francis Smookler, 45; and Frangesco Russo, 38, were also charged.
All four have been charged with wire fraud, wire fraud conspiracy, money laundering and money laundering conspiracy, prosecutors said. Kurland was also charged with honest services fraud.
All four pleaded not guilty Tuesday, and all but Russo were freed on bond, The Associated Press reported.
Russo and Smookler are also accused of threatening to kill a jewelry merchant and torture his wife and son unless the merchant repaid a $250,000 “street loan” in the amount of over $400,000, prosecutors said. The merchant, Gregory Altieri, was indicted last month in what prosecutors called a $200 million Ponzi scheme. Some of the money from the lottery victims was invested with Altieri, and it was lost, but the loan was called a separate matter in court documents.
An attorney for Chierchio, Gerald J. McMahon, said his client was “not guilty of these fraudulent charges” and denied that Chierchio was a member of organized crime. “If he were not Italian, there would be no accusation of this nature,” McMahon told the AP.
One of the attorneys representing Russo, Joseph Conway, said in an email that Russo “looks forward to presenting evidence at a future trial to clear his name of these charges.” Bond was set at $2 million, but he was still detained Tuesday night pending an appeal from prosecutors.
Emails seeking comment to lawyers listed as representing Kurland and Smookler were not immediately returned Tuesday night.
Among the victims of the scheme was someone who won $1.5 billion in Mega Millions and another person who won a $245 million Powerball jackpot, the U.S. attorney’s office said. The third victim won a $150 million jackpot.
The lottery winners sought help from Kurland and his firm for advice on investments, prosecutors said.
Kurland gained their trust with traditional investment options from large and well-known institutions, but he then is alleged to have steered them to invest in businesses or other entities controlled and directed by Russo, Smookler and Chierchio, prosecutors said.
Prosecutors said that Kurland was paid kickbacks and that the investments were used to keep the scheme going. The money was stolen to fund “lavish lifestyles,” prosecutors said.
Kurland’s law firm, Rivkin Radler, said that the charges had taken it “by complete surprise” and that it is cooperating with the federal investigation, the AP reported. The firm issued a statement saying it was “taking immediate steps to remove Mr. Kurland as a partner.”
Kurland has been interviewed in the media in the past regarding large lottery jackpots, including by NBC News.
By July, some of the defendants, who were aware of an FBI investigation, became concerned that they could go to jail, according to court documents.
Smookler is alleged to have told Chierchio in one call that “we have to [expletive] give that money back to these people,” and he appeared worried that the federal government had documents, according to court papers.
Court documents say Kurland pocketed hundreds of thousands of dollars in undisclosed kickbacks from the investments, while “the other defendants stole far more money directly from the investments.”
