Photo: HayDmitriy/Depositphotos
The chances of winning the lottery are one in a million. But not for Stefan Mandel. In the 1980s and 1990s, the Romanian-Australian economist managed to win the lottery an astounding 14 times. Everything he did was perfectly legal and all it took was some simple calculations.
Mandel was born in Romania and his first two wins came in his home country. He was spurred to win the lottery to collect enough money to move his family out of the then-Communist country. To do so, he developed an ingenious system. First, he looked at different lotteries to see how many different combinations were needed to cover every possible draw.
For instance, if a particular lottery plays numbers 1 to 40 and requires a six-number combination to win, there are 3,838,380 possible outcomes. Mandel realized that sometimes purchasing enough tickets to cover every combination cost less than the potential jackpot. For instance, if the jackpot was $10 million and tickets cost $1, someone could buy all the tickets up and guarantee themselves a win, as well as a handsome profit. All he needed to do was raise enough capital to buy the tickets.
This is how he began forming lottery syndicates, where investors put in money to purchase lottery tickets, and the winnings were split. His first win using this system earned him a $19,000 jackpot, of which he pocketed $3,700. While that might not seem like much, it was enough to move his family out of Romania and settle down in Australia.
While in Australia, he won a staggering 12 jackpots, plus many other smaller prizes. Mandel set up larger and larger syndicates, all while staying within the rules and regulations of the game. At the time, it was legal to print tickets at home, which allowed Mandel to purchase millions of tickets and automate a way to fill in the different combinations.
After big wins in the UK and Australian lottery, rules were adjusted to prevent bulk ticket purchases and block the use of computer-generated tickets. This effectively blocked Mandel in those countries, so he set his sights further afield. He began scouting the American lottery and settled on Virginia as the perfect jackpot.
Since it only used the numbers 1 to 44, the number of combinations was far less than in other states. Mandel opened a corporation, Pacific Financial Resources, and set up a trust called the International Lotto Fund. Thousands of investors poured millions into the fund and he hired 16 employees who spent three months printing the 7 million tickets necessary to guarantee a win.
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In February 1992 the Virginia prize reached $27 million, so Mandel decided it was time to deploy his strategy. Using the pre-printed pay slips, a carefully coordinated team went into stores that had made prior agreements with Mandel and purchased the tickets. There were some complications when one store dropped out at the last minute, meaning that only 90% of the winning combinations ended up being purchased.
Ultimately 90% was all they needed, and the syndicate ended up winning the jackpot, along with $900,000 in secondary prizes. However, the win drew attention, and Mandel was heavily investigated by the CIA and FBI. In fact, it took a four-year legal battle before everything was cleared up in Mandel’s favor. To prevent this from happening again, lottery authorities changed their rules to block his system.
While Mandel ended up pocketing millions, his investors were left with far less than their promised payout. But not everything went Mandel’s way. In 1995, he ended up filing for bankruptcy and even spent 20 months in Israeli prison for an investment scam. Today, he leads a quiet life in the South Pacific on the island of Vanuatu, where several members of his former syndicate have also retired.
In 2012, he gave a rare interview to the Romanian newspaper Bursa, where he minimized the risks he took to win big. “I’m a man who takes risks, but in a calculated way,” he shared. “Trimming my beard is a lottery: There is always the possibility that I’ll cut myself, get an infection in my blood, and die—but I do it anyway. The chances are in my favor.”
h/t: [New York Post]
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