The Ontario Lotto and Gaming Corporation paid out a $5.75 million dollar jackpot to a Toronto store owner because they had "no reason" to doubt the man's version of how he came to buy the winning ticket, the provincial agency states in court documents.

But now the lottery corporation alleges that they were duped by Hafiz Malik in January of 2005, according to a statement of claim that was filed in Ontario Superior Court.

The Crown corporation has retained a prominent Toronto law firm to represent them it their lawsuit against Malik. They are currently seeking the return of the $5.75 million dollar jackpot and their legal costs. "Key representations made by Malik to OLG were false and were made with an intent to deceive and with knowledge that OLG would rely on them," state the documents.

Malik was charged by police in December with two counts of fraud, one count of theft and one count of possession of stolen property related to the lottery jackpot in June of 2004. Since he was charged all of his assets have seized and he is now out on bail.

So far none of the allegation have been proven in court and they are all being explicitly denied by Malik in the civil lawsuit. "He was the true owner of the ticket and was lawfully entitled to the prize," says a statement of defence filed last month by the lawyer representing Mr. Malik.

The lottery corporation held a news conference at the time of Malik's arrest to state they had paid the $5.75 million dollars to the "rightful owners". Those owners are a group of coworkers in Toronto that allegedly purchased the winning ticket in Orillia.

Chief Executive Kelly McDougald said, "The OLG conducted its own thorough and independent investigation that confirmed the group's claim". The National Post obtained internal documents last December that revealed a different story. When Malik presented his winning ticket more then six months after the June 2004 lotto 6/49 draw there wasn't a formal "insider win" investigation.

He was only interviewed be a "winners associate" at the lottery corporation and there wasn't a probe by internal security staff. "The processes back in 2005 were deficient," conceded lottery corporation spokesman Jim Cronin in an interview with the National Post in December.









- 2008-04-15