A Yangzhou court sentenced 15 people to jail terms for manipulating scratch-and-win lottery sales in the biggest lottery scandal in China, the Shenzhen Special Zone Daily reported Thursday.

Zhang Shipeng, head of the Shenzhen-based Cai Shi Ta company, was sentenced to 14 years and fined 25 million yuan (US$3 million). Pei Xiuping, financial chief of the company and wife of Zhang, was sentenced to 13 years and fined 20 million yuan in a ruling handed down by the Yangzhou Intermediate People's Court in Jiangsu Province on March 25 this year.

Thirteen others involved in the fraud were sentenced to jail terms ranging from two to 11 years.

The Cai Shi Ta company was convicted of earning 58.06 million yuan through manipulating the scratch-and-win lottery sales in 17 cities from December 2001 to November 2002. Some 44.88 million yuan in illegal earnings was confiscated.

The fraud was the biggest lottery scandal ever exposed in China in terms of money, staff, and the area involved, but it did not become a media focus until recently.

The company started the scams in Shenzhen in December 2001, as contractor of the scratch-and-win welfare lottery sales in the city. Small magnets were inserted in big prize-winning lottery balls and attracted the lottery balls to corners of the lottery box with larger magnets. Trained people could then take the lottery balls and claim the big prizes.

The scandal was exposed in Yangzhou City in East China's Zhejiang Province in November 2002 when a staff member disputed with headquarters the division of a 500,000-yuan prize.

Insiders say the scandal exposed many loopholes in lottery sales including poor supervision, unqualified contractors, and irresponsible notaries.

The Shenzhen Civil Affairs Bureau, sponsor of welfare lottery sales in city, said it would take a lesson from the scandal and try to avoid similar incidents.

(Shenzhen Daily June 18, 2004)