$13 Million Lottery Winner Goes to Prision After Tax Fraud and Bankruptcy
By Jonathan Ginsberg, Atlanta Bankruptcy Attorney on Aug 19, 2008 in Bankruptcy Cases & Legislation, Florida, Tax Issues
Twenty years ago, Tampa resident Rhonda Toth and her husband won $13 million from the Florida lottery. In August, 2008, Mrs. Toth found herself in jail - sick, broke, and alone. Despite the multimillion dollar windfall, the Toth’s case demonstrates that bad luck and bad decisions can lead anyone into financial ruin.
According to the report in the St. Petersburg Times, the Toth’s biggest problem related to tax reporting and tax payments. Mrs. Toth and her late husband reportedly owe the IRS $2.5 million. Mrs. Toth found herself facing prison for filing a false tax return. The article does not say how the Toth’s came to owe so much tax debt, but it most likely did not come from the initial lottery payment as the IRS takes its share when the money is disbursed.
Court records show that the Toth’s filed Chapter 13 bankruptcy in 2001 and in 2002, but that neither case was successful.
The Toth case should serve as an example of how quickly money can disappear if it is not managed correctly. This case should also demonstrate that the IRS can play hardball, a fact that is especially true in challenging economic times. Most of us will never hold in our hands a check for $6 million, but even if we did, there is no guarantee that even that large sum of money will insure financial security.
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