Lottery Winners Bilked In $107M Scheme; 3 Long Islanders Charged

LONG ISLAND, NY — Three Long Islanders were among four people charged in federal court Tuesday for their roles in a scheme to bilk lottery winners out of over $100 million — money that was then used to fund extravagant lifestyles — including buying two yachts.

An indictment unsealed in Brooklyn federal court charged attorney Jason Kurland, 46, of Dix Hills; Christopher Chierchio, 52, of Staten Island; former securities broker Francis Smookler, 45, of Oyster Bay; and Frangesco Russo, 38, of Roslyn, with wire fraud, wire fraud conspiracy, money laundering and money laundering conspiracy in a scheme to defraud Kurland’s clients, federal prosecutors said. Kurland was also charged with honest services fraud. Russo and Smookler were also charged with extortionate extension and collection of credit after prosecutors said they threatened to kill a jewelry merchant and his family for failing to pay back a usurious loan.

Kurland, who calls himself the "Lottery Lawyer," claimed to represent dozens of lottery winners across the country with combined winnings of about $3 billion, authorities said. Among his clients: the winners of a $1.5-billion Mega Millions jackpot, a $245-million Powerball jackpot, and a $150 million jackpot. The winners each paid Kurland and his law firm hundreds of thousands of dollars, prosecutors said. In exchange, he offered tips on safely investing the winnings.

But after gaining their trust through traditional investments, Kurland steered the clients toward various entities and business deals controlled and directed by Russo, Smookler and Chierchio, authorities said. In exchange, Kurland received kickbacks from the trio — something he never disclosed to his clients, prosecutors said.

The group used that investment money to continue running the scheme and enrich themselves, authorities said. Some money was funneled back to the lottery victims under the guise of "interest payments," while other funds were diverted as kickbacks to Kurland, prosecutors said. Additionally, millions were stolen and used as a slush fund, allowing the group to spend on private jets, lavish vacations and luxury vehicles, including two yachts, prosecutors said. Money that the group actually invested in various entities and deals was largely lost, authorities said.

In intercepted calls, the group talked about the scheme and tried to hide their dealings, even expressing concern over consequences if they were caught, court documents said.

Russo and Smookler invested some of the stolen money with jewelry merchant Gregory Altieri, authorities said, and then extended him a dubious $250,000 "street loan."

In recorded conversations, Russo and Smookler indicated they would be paid back over $400,000 for the loan. The duo threatened Altieri when they came to collect, prosecutors said.

Russo said he had a "few tactical shotguns ... with lasers," and Smookler said that if Altieri did not fully repay the loan, "it’s just going to be unbelievable," prosecutors said. Russo likened himself to a mobster from Adam Sandler's film "Uncut Gems."

On another call, authorities said Russo told the merchant "They’re gonna pop your head off in front of your f------ kids. This guy has no clue what he’s getting into."

Smookler added, according to prosecutors: "You watch my man, you f-----d me, now watch what I am gonna do to you, I’m coming brother. Full f-----g steam ahead."

The duo also threatened to hurt Altieri’s family if didn't repay the loan, authorities said. Smookler told Altieri: "[W]e are gonna find your wife today. That’s happening." Russo added the people coming for him were “going to make you watch as they rip your son’s teeth out of his mouth, watch, they’re going to do worse things to your wife.”

The government has taken steps to recover stolen money in the scheme, including seizing 13 bank accounts and placing liens on three properties bought or renovated by Smookler and Russo with stolen money, authorities said

"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," Seth DuCharme, Acting U.S. Attorney for the Eastern District of New York, said in a news release. "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."

“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,” William Sweeney, Jr., assistant director-in-charge at the FBI's New York field office, said in a statement. “The FBI New York discovered how 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.”

This isn't the first time Chierchio has been accused of criminal wrongdoing.

The Staten Island businessman and father of three served 18 months in state prison after pleading guilty to bribing a labor official in 2004.

Chierchio was also accused of being a mobster in the Genovese organized crime family who rigged construction deals. A state Supreme Court justice found Chierchio, who owns Rci Plbg, not guilty last year in that case.

When he was arrested, authorities called Chierchio a "reputed soldier" in the Genovese family stemming from a prior investigation dubbed "Operation Shark Bait." In that case, more than a dozen people were arrested on enterprise corruption charges in Brooklyn.

Chierchio told SILive.com the mobster label is "complete nonsense."

Kurland is a partner at Rivkin Radler, a law firm based in Uniondale. He was quoted in a January interview with CNBC as an expert in protecting lottery winnings, even offering advice such as remaining quiet about winning, protecting the ticket, and factoring in how much will be taken in taxes.

"The last thing you need is people asking for handouts, or friends and family offering advice about how to claim the money,” Kurland told the news outlet.

Laurie Bloom, director of communications and marketing at Rivkin Radler, told Patch in a statement Tuesday the law firm was caught off guard by the allegations and was not involved in any such scheme.

"We were taken by complete surprise by the allegations against Mr. Kurland,"she said. "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 Kurland as a partner, Bloom said.