Ocean County Man Operated Illegal Gambling Business

  BEACHWOOD – A local man has pleaded guilty to operating an illegal lottery business and failing to pay over $65,000 in federal taxes on his earnings, authorities said.

  On April 20, 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. This 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.

  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. 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.

  Each drawing of the illegal lottery included up to 8,000 participants and the cash prize for each drawing often exceeded $100,000, according to the ledgers. Since O’Neill was operating and managing the illegal lottery, he kept 10 percent of the winnings from each drawing.

  O’Neill admitted that between 2014 and 2018, he did not account for approximately $250,000 in cash winnings from the illegal lottery on tax returns he filed with the IRS, subsequently underpaying his federal incomes taxes by $65,674.

  The gambling charge O’Neill pleaded guilty to carries a maximum penalty of five years in prison. 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. Sentencing is scheduled for August 25.

  Acting U.S. Attorney Rachael Honig thanked special agents of the U.S. Attorney’s Office, under the direction of Supervisory Special Agent Thomas Mahoney; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez; and special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, for their work in this case.