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Deputies charge lottery winner with welfare fraud

Anthony Palermo has been receiving $1,000 a week since he won on the New York State Lottery's "Win for Life" scratch-off game 14 years ago.

The 51-year-old Albion resident might continue collecting his winnings from a prison cell, if he's convicted on three felony charges for allegedly cashing in on more than $4,000 in public assistance benefits he wasn't entitled to, authorities in Orleans County reported Thursday.

Palermo was charged with welfare fraud, grand larceny and offering a false instrument for filing. He was arraigned Thursday afternoon before Albion Town Justice Gary Moore and released on his own recognizance pending an April 17 return to court.

Authorities said Palermo was arrested following an investigation by Orleans County Fraud Investigator Marie Snyder and county sheriff's officials that showed he allegedly applied for public assistance last September and began receiving benefits.

Palermo received more than $4,000 in benefits dating back to last fall from Medicaid and the Home Energy Assistance Program, according to Orleans County officials.

Snyder received a tip that Palermo recently attempted to apply for Emergency Cash Assistance benefits and learned he had been a 1998 lottery winner who began collecting his $1,000 per week winnings on the $1 million guaranteed minimum prize. He is believed to have collected nearly $700,000 in that time, officials said.

"It's my job to make sure that people who attempt to defraud the taxpayers of Orleans County are stopped and are forced to either repay the money or face the consequences," Snyder said. "This is what we do every day."

It remained unclear Thursday what may have motivated Palermo to seek additional money by allegedly defrauding public assistance programs.

Public records show, however, that last August, Palermo may have sold future lottery winnings to Stone Street Capital, a Maryland financial firm that specializes in "lump sum" payouts.

The business, among other things, provides lump sum payments for "for lottery prizes, corporate contest prizes, and slot jackpots that are paid out over time," according to its website.

Thomas Kuryla, Orleans County's commissioner of social services, said changes in state law governing public assistance contributed to the problem.

"Local districts have been placed in a very precarious position as the result of the state's lenient rules and regulations, particularly the fact that Medicaid applicants no longer must appear in person to obtain benefits," Kuryla said.

Added Dave Callard, Orleans County legislative chairman: "This is just one of the more egregious examples of the kinds of things that our employees are dealing with all the time."

Orleans County Sheriff Scott Hess said, "We are working with the Department of Social Services on a daily basis to see that taxpayers are not being taken advantage of. It is important that the citizens of Orleans County know that their local officials take their responsibility as stewards of taxpayer money very seriously."