A Long Island attorney who specializes in representing people who won major lottery jackpots was arrested by the FBI Tuesday, along with a soldier in the Genovese organized crime family, on charges of ripping off the winners of three lotteries for a total of $107 million, federal prosecutors said.
The three alleged victims, who were not named by prosecutors, were described as the winners of a $1.5 billion Mega Millions jackpot; a $245 million Powerball jackpot, and a $150 million jackpot, officials said.
Jason Kurland, 45, of Dix Hills, who bills himself as “The Lottery Lawyer,” was charged in federal court in Brooklyn, along with Christopher Chierchio, 52, of Staten Island, with conspiracy, wire fraud and money laundering. Kurland was charged additionally with honest services wire fraud.
Chierchio was identified as a mob soldier in court papers by Eastern District prosecutors.
Two other people who officials said handled money that was siphoned off from the victims of the scheme were also charged: Frangesco Russo, 38, of Roslyn, and Francis Smookler, 45, of Oyster Bay.
Russo and Smookler were additionally charged in a separate scheme with extortionate extension and collection of credit for “threatening to kill an individual and his family” for not repaying $250,000 they had lent him, officials said.
On his personal website, Kurland said that the $1.5 billion jackpot was in South Carolina, and a $245.6 million jackpot was won in New York.
Kurland was featured on the website of the Long Island law firm, in which he was a partner, Rivkin Radler in Uniondale.
A spokeswoman for Rivkin Rader, Laurie Bloom, said in a statement: “The firm has no role in nor knowledge of the criminal activities described. We were contacted today by the U.S. Attorney’s office and are cooperating in their investigation. The Firm is taking immediate steps to remove Mr. Kurland as a partner with the firm.”
The scheme was "relatively simple," according to prosecutors. Kurland got a fee and a monthly retainer from the winners for recommending the placing of jackpot money in what was supposed to be sound financial investments. But the companies Kurland recommended were in fact marginal businesses controlled by Russo, Smookler and Chierchio.
Kurland then got a kickback of the investment money from the three, and most of the investments turned out to suffer great losses, prosecutors said.
But as part of the scheme, Kurland, Chierchio, Russo and Smookler also used the alleged victims’ money to support a lavish lifestyle, buying luxury cars, including a Porsche, a Bentley and a Range Rover; boats; and paying dues at upscale country clubs, according to court papers.
At one point, on a wiretap, according to federal prosecutors in court papers, Smookler tells Chierchio that he is worried that the FBI has begun to investigate the scheme.
And Chierchio replies that the FBI has been investigating him “my whole life,” and adds: “It doesn’t matter. I laugh at them. OK? I laugh at them.”
Smookler’s attorney Kevin Keating said that his client had placed the money he had gotten from the lottery winners unknowingly with a person who was running a Ponzi scheme and who was indicted by federal prosecutors last month on unrelated charges. Keating had no comment on the alleged extortion scheme his client was charged with.
“It’s a peculiar indictment in that it alleges that these defendants -- like many other Long Islanders -- were victims of ... [a] scam, yet they now stand charged for these losses," Keating said.
Russo’s attorney, Joseph Conway, declined to comment.
Kurland’s attorneys could not be reached.
Gerald McMahon, Chierchio’s attorney, said his client is not guilty of any fraud, nor is he involved in organized crime.
McMahon said his remarks to Smookler were just braggadocio, and “If his name were McMahon or Finkelstein” he would not be in this case. When it comes to people with Italian names, “The feds just love to do it,” McMahon said, referring to his client’s alleged linkage to the mob.
Federal officials said that in his 20-year legal career, Kurland represented jackpot winners who won a total of $3 billion.
“In his pitch to clients, Kurland offers trust, transparency and sophisticated financial advice to minimize financial risk,” Eastern District federal prosecutors said in court papers. “He has promoted those qualities in interviews, stating in one that it is important for lottery winners to ‘know that someone can walk you through step by step, so there are no surprises.’ "
“Defendant Kurland allegedly violated the law and his oath as a lawyer when he allowed co-conspirators to pillage his clients’ bank accounts for their own enrichment,” Acting Eastern District United States Attorney Seth DuCharme said in a statement.
“In addition, Russo and Smookler allegedly threatened to torture an individual’s wife and children. The defendants callously thought they could line their pockets with lottery winnings without consequence, but today their luck ran out.”
All of the defendants pleaded not guilty. Kurland is free on $1 million bond. Chierchio is free on $3 million bond. Smookler is free on $2.5 million bond.
Magistrate Judge Lois Bloom approved $2 million bond for Russo, which the government is appealing.
New York FBI head William Sweeney said: “Lottery winners can't believe their luck when they win millions of dollars, and the men we arrested this morning allegedly used that euphoric feeling to their advantage … these victims were persuaded to put large chunks of their cash into investments that benefited the defendants. Rather than try their luck at the lottery, these men resorted to defrauding the victims to get rich but their gamble didn’t pay off."