Feds say real estate exec duped investors out of $19M spent on Michigan lottery
Detroit — Federal prosecutors accused a Shelby Township real estate executive Thursday of defrauding investors out of $19 million that he spent playing the Michigan lottery, according to federal court records.
Viktor Gjonaj, 43, founder of Title Plus Title Services, was charged with wire fraud and accused of orchestrating a years-long scheme to obtain money from investors so he could buy as much as $1 million in Daily 3 and Daily 4 lottery tickets every week.
Gjonaj was charged in a criminal information, a type of charge that indicates a guilty plea is expected. The charge is punishable by up to 20 years in prison.
“This case shows us that criminals may use sophisticated methods and apparently legitimate businesses, but their crimes amount to nothing more than stealing other people’s money," U.S. Attorney Matthew Schneider said in a statement. "The defendant’s gambling harmed not just himself, but many other innocent victims as well."
Gjonaj did not respond immediately to a message seeking comment Thursday.
“Viktor Gjonaj was a well-respected businessman who unfortunately developed a gambling addiction that led to this situation,” his lawyer Steve Fishman told The Detroit News. “His addiction was well known to the state of Michigan which, nevertheless, allowed him to keep gambling.”
Court records chronicle the life of an alleged scam that has its roots in the state lottery.
In 2010, Gjonaj started playing the daily lottery games and over the next six years "thought he had discovered a guaranteed way to win huge jackpots and substantially increased the number of times he played and amounts he spent," Assistant U.S. Attorneys John Neal and Karen Reynolds wrote in the court filing.
But by 2017, Gjonaj's losses were mounting and he was losing more than he could afford, the prosecutors wrote.
"Instead of ending his gambling on the Lottery games, Gjonaj devised a scheme to trick individuals into giving him money," prosecutors wrote. "Using his experience as a real estate broker and investor, Gjonaj created Title Plus claiming that it would serve as the closing agency for real estate deals he was brokering."
At the time, Gjonaj convinced people to give him money that he would invest in lucrative real estate deals, prosecutors said. Gjonaj had the investors transfer money into Title Plus bank accounts.
"In order to trick and induce investors into continuing to give him money, Gjonaj described entirely fictitious real estate deals and often paid investors 'profits' which he falsely claimed resulted from the sale of real estate," prosecutors wrote.
But Title Plus was a phony company that was never involved in real estate deals, according to the court filing.
"All of the money paid to Gjonaj was used by him to play lottery games and to cover his losses in those games," the prosecutors wrote.
He was spending more than $1 million a week on lottery games using investors' money until the alleged scheme fell apart in August 2019, according to the government.
"The defendant’s lies have caught up with him and he will now face the consequences of his fraudulent scheme," Timothy Waters, special agent in charge of the FBI in Michigan, said in a statement.