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Illustration by Stefano Vitale

No sooner had Gerald Reif won the Wisconsin Lottery in 1990 than the pickpockets, as he calls them, descended upon him. Count-less companies called with offers to buy his annual lottery payments for a lump sum far less than the $4.8 million (minus taxes) he won. “I keep telling them ‘no,’ they keep calling,” he complains.

It’s been 16 years since he won, but Reif says 14 different companies still call him monthly with their slippery deals. And they aren’t the only ones who want to rip you off, he says. “This I’ve learned: Don’t ever tell anyone you’re a lottery winner.”

Reif was just scraping by on his salary as a factory worker at the General Motors plant in Janesville before winning. Sadly, his wife, Rita, was diagnosed with terminal cancer shortly after he won. The money would afford Rita a level of end-of-life care that wouldn’t have been possible with Reif’s GM insurance alone. “God gave me that money for a reason,” he says. “To help my wife.”

Reif’s story does seem touched by providence. But many other lottery winners seem to descend closer to rings of hell Dante forgot to mention than rise to the paradise so often imagined. Public records for past winners, obtained by Milwaukee Magazine, suggest a high incidence of troubles for these “lucky” people: Financial problems, criminal arrests, substance abuse and divorce are disturbingly common.

Tales of sudden riches to ruin are nothing new. Stories describing the wreckage of privileged lives is a staple of American pop culture and never more than a Britney Spears story away. Yet lotteries continue to thrive.

It’s too ingrained in our culture, says Susan Bradley, founder of the Sudden Money Institute, an organization that advises the sud-denly rich. “In our civilization, money is good, and more is better,” she says. People see the carnage that instant money has brought to the lives of others but still believe they would fare differently if a pile of cash was suddenly handed to them. “Everyone thinks winning the lottery is a problem they would like to have,” says Bradley.

And so the tickets keep getting bought and the balls keep getting drawn. The Wisconsin Lottery posted its best quarter ever in the beginning of 2006, taking in a hefty $142.4 million from January 1 to March 31.

 

According to promotional materials from the Wisconsin Lottery, the big game has yielded $2.062 billion in property tax relief since it began in 1988. Theoretically, it’s a win/win/win situation. Players enjoy a game of chance, property owners pay less taxes and a few lucky people become sultan rich.

Opponents argue that the poor foot too much of the property tax relief, paying a disproportionate amount of this “voluntary tax.” A 1999 study by the Consumer Federation of America found that nearly half of those sampled with incomes of $15,000 to $25,000 believe winning the lottery is their best chance at gaining a $500,000 nest egg. Other studies show that the heaviest lottery players, the 20 percent of people that account for 82 percent of lottery revenues, are disproportionately low-income minority men with less than a college education.

Meanwhile, how the winners fare after being handed a life-altering windfall goes largely unexamined. State lotteries seem only interested in plastering toothy smiles and “Oh my God, I can’t believe it” quotes of winners taken during the initial high of their win. The picture of many winners a few years later might not sell tickets.

“Everybody dreams of winning… but nobody realizes the nightmares that come out of the woodwork,” bankrupt lottery winner William Post III told the press in 1993.

A shockingly large number of lottery winners end up in financial ruin. National statistics show that about one-third of lottery win-ners ultimately file for bankruptcy. Often, that’s just the initial symptom of good fortune gone bad.

“It’s supposed to be a happy thing,” says a Neenah woman we’ll call Nancy, whose husband won $7.2 million in 1989 and who agreed to talk on condition of anonymity.

“But not really.”

 

Milwaukee Magazine attempted to contact all Wisconsin Lottery winners of prizes of $500,000 or more since 1988. We made countless calls, left many messages and then tried the mail, sending out 44 letters asking winners for an interview. The silence was deafening. Few agreed to share their story. Most who consented insisted on anonymity.

Winners are reluctant to make themselves known, says Catherine (not her real name), a professional in the human development field who is divorced from a Wisconsin man who won a $7.3 million Megabucks jackpot, because there is “a lot of fear, shame and disempowerment” that comes with winning. “If winning the lottery was a joyful, positive experience, I don’t think you would be running into people not wanting to talk to you,” she says.

Before hanging up on us, a few winners made brief reference to bad experiences brought on by the publicity of their good fortune. “We are very happy that people have forgotten about us,” one lottery winner told us. “We don’t want to bring it all back.”

Whole industries thrive by preying on lottery winners. And even if winners evade the professional predators, they then face a more formidable challenge – a flood of requests for cash from friends, family, casual acquaintances, even complete strangers. This is one of the major causes for the feelings of disempowerment, says Catherine. “Winners feel they are powerless to set boundaries.”

Nancy recalls a stranger who wrote to demand money to buy a farm with “lots of sheep,” persisting, with stalker-like determination, until her husband threatened to go to the cops. Another woman, a neighbor, hand-delivered a multi-page list of requests asking for payment of credit card bills and vacations. A family member to whom Nancy hadn’t spoken in 30 years called and asked for $150,000 to fund a sketchy business venture overseas. “There’s lots of stories like these,” she says.

Nancy and her husband resisted most of the myriad requests for cash but admit to being taken advantage of several times and losing “lots of money and friends,” she says. Relationships are an all-too-common casualty of sudden riches.

“People call requesting money to fund operations for their children, all sorts of reasons,” says Catherine. “It can be really hard to say no.”

Some winners, aware of the feeding frenzy a publicized win can bring, attempt to protect their identity by claiming their prize un-der the cloak of a partnership or trust. But this guise is easily penetrated under state open records laws. The Lottery maintains copies of official trust and partnership documents, which contain the names of the winners.

Lotteries have no interest in protecting identities anyway since real-life stories of new winners help sell tickets. The Wisconsin Lot-tery spends $4.6 million of its revenues on advertising every year. The promotion they get from a media story of a giddy new winner: priceless.

 

Whether by falling-victim to financial leaches or just blowing jackpots frivolously, the riches of many winners soon turn to rags. For many, the problem starts from day one when they are handed the

obligatory oversized check for publicity shots. It is inflated in more ways than one.

Jack Scimeca, owner of a Wautoma campground, won a $4 million Megabucks jackpot in 2005 and soon realized its real value. “The $4 million that people read about in the newspaper turned out to be more like $1.3 million,” he says.

The $4 million comes only if you accept an annual annuity, which extends payment into the future, when money always declines in value. If you take the lump sum payment now, as Scimeca did, you get paid only the current value of the $4 million, or $2.3 million. After taxes were removed from his payout, the sum was reduced further to $1.5 million. But that wasn’t the end of the story.

“This April, I was surprised to find out that the government didn’t take enough in taxes. I had to come up with an additional $173,000,” he says. “It’s very misleading, and I can see how people get in trouble.”

A number of winners of prizes of $500,000 or more currently owe taxes to the State of Wisconsin. Tax information isn’t a public record so only those severely in debt can be identified by tax warrants and liens issued by the state and federal government.

Eugene Yuma won a $1.3 million Megabucks prize in 1992. In 2003, the State of Wisconsin issued a $35,466 tax warrant for him and his wife. Wells Fargo Bank, N.A. has also filed four mortgage foreclosures against the couple.

Donald Bottolfson, who won a $9.7 million Megabucks prize in 1994, had $45,727 worth of tax warrants issued against him. He has since satisfied his debt to the state.

Robert Ostrowski, a man who won a $7.9 million Megabucks jackpot in 1992, owes close to a half-million dollars in delinquent state taxes. In 2005, the IRS filed a $356,697 federal tax lien against him. Until July of last year, Ostrowski owned and operated a bar on 63rd and Blue Mound named Bob EO’s, after himself. The bar is now called Cassidy’s. He reportedly sold it under the pressure of substantial debt.

“He owes so many people money, it’s ridiculous,” says Todd (last name withheld by request), a bartender at Cassidy’s who has known Ostrowski for years. “One time, some guys from Vegas came into Bob EO’s and stripped Bob of all of his gold-nugget Mr. T jewelry in front of his customers,” he remembers. “He had a beautiful condo on Prospect. As far as I know, he now lives out of his car. If he still has it.”

Ostrowski was arrested in Wisconsin in 2004 for writing bad checks in Nevada, and Wisconsin Circuit Court records show multi-ple legal actions by private entities seeking to recover money he owes.

While Ostrowski’s case is extreme, it pales in comparison to the situation of Mary Fahley, who was part of a group from Oshkosh that won $16 million from the lottery in 1994. Since winning, Fahley, who is treated for depression, has filed for bankruptcy and was charged criminally in March for offering to perform oral sex on an undercover cop for $200. She pleaded guilty to the prostitution rap in April.

Some of Fahley’s Oshkosh lottery cohorts haven’t fared much better. One man had seven monetary judgments awarded against him by the courts. Another lost his home to foreclosure.

But financial problems are often just the most visible sign that winners are in what Bradley calls “toxic overwhelm.” A winning lottery number will end life as you know it.

 

Divorce may now be as American as apple pie, but lottery winners have a bigger slice of it. Bradley likes to tell what she calls a “kind of” true story that illustrates this trend:

A woman learns she has won $20 million in the lottery while at work. Excited, she jumps into her car and speeds home. She bursts through the front door and yells to her husband, ”Pack your bags, I just won the lottery.” Jumping up and down in elation, the husband asks excitedly, “Should I pack for the mountains or the beach?” The woman replies, “I don’t care, just get out.”

Divorce is often a sign that winners are falling into a phenomenon called “social anomie,” a distorted perception that life no longer has rules or boundaries. When someone is suddenly given a king’s ransom, they feel a rush of total freedom, a sense that they are no longer subject to anything that binds them to a certain etiquette or course of action. The all-too-common result: run-ins with the law.

Of the 32 Wisconsin lottery winners for which we were able to verify identities, nine have been arrested for drunk driving. That’s nearly 30 percent.

Nancy’s husband, who had no arrests prior to his win, has since been charged with driving under the influence, obstructing or re-sisting arrest and disorderly conduct. After drunk driving, disorderly conduct is the most common charge Wisconsin Lottery winners face, perhaps not surprising for people who may no longer feel that rules or boundaries apply to them.

Family members too often pay the price when lottery winners lose their moorings. In 2000, a Germantown woman named Wendy Novitzke split a $10 million Powerball jackpot with her son, Jeremy Bruyette. Bruyette is a convicted sex offender. Last summer, police responded to a call from Novitzke. According to the court complaint, Bruyette showed up at her residence, accused her of lying to him and forced his mother into a corner of her porch, where he kept her while having a conversation with an imaginary person on her lawn. At some point, Novitzke was able to escape and call the police. She told officers her son had become a “paranoid schizophrenic.”

Thomas Glowinski won $7.3 million in 2000. In May, Glowinski’s ex-wife, Lori, had a child abuse restraining order issued against him. After this marriage, Glowinski was married and divorced again and then took up with a new girlfriend. Her son, Mat-thew Chasco, has also filed a restraining order against Glowinski, alleging that the lottery winner beat him up and threatened to shoot him and gouge his eyes out. Chasco cited a “history of violence and domestic abuse” by Glowinski, who was also charged in 2004 with a hit-and-run criminal traffic violation that has since been amended and reduced.

Allegations of robbery, criminal traffic violations, drug possession, harassment and assault are all found in the public records of Wisconsin lottery winners.

It can be even worse for people who were troubled before they won. “Any problem you have, even those you don’t know you have, gets drawn out and magnified by the pressures of winning the lottery,” says Catherine.

Playing the lottery is about taking a chance on really bad odds, something like 1 in 175 million. But winning the lottery, it turns out, also means taking a big risk, dooming many winners through a windfall they saw as salvation. Yet no one would ever turn away a jackpot – except, perhaps, those who have already received one.

“I wish it would never have happened,” says Nancy.

Mario Quadracci is an assistant editor of Milwaukee Magazine.