The Woman Who Hid $1.3 Million in Lottery Winnings and Lost It All
She hid $1.3 million. He got every penny.
Key Facts
What Happened
In December 1996, Denise Rossi won $1.3 million as part of a lottery pool in California. Rather than sharing the news with her husband Thomas, she immediately consulted with the California State Lottery Commission about how to keep the winnings secret. Less than a month after winning, she filed for divorce, telling Thomas she simply wanted a fresh start.
To conceal the windfall, Denise used her mother's address for all lottery correspondence, including the annual installment checks. Thomas, a factory worker, was blindsided by the sudden divorce but accepted it. The dissolution proceeded without any mention of the lottery winnings, and Thomas received a modest settlement that reflected their seemingly ordinary financial situation.
The scheme unraveled a year and a half later when a company specializing in lump-sum buyouts of lottery payments accidentally sent a letter to the couple's former shared address, which Thomas still occupied. The letter, addressed to Denise, asked if she was interested in a lump-sum buyout of her lottery annuity. Thomas immediately contacted a lawyer.
The case went before a California family court, which found that Denise had intentionally concealed the winnings in violation of California's asset disclosure laws, constituting fraud. Under California Family Code Section 1101, the court awarded Thomas 100% of the lottery winnings, not merely the 50% he would have received in a community property split. The California Court of Appeal affirmed the decision in In re Marriage of Rossi (2001), making it one of the most cited cases in family law for asset concealment.
Legal Breakdown: Concealing assets during divorce constitutes fraud and can result in losing everything
Mandatory Financial Disclosure
California law requires both spouses to make full and accurate disclosure of all assets and liabilities during divorce proceedings. This obligation exists regardless of whether the other spouse asks about specific assets. Denise's failure to disclose the lottery winnings was a direct violation of this legal duty.
Penalty for Asset Concealment
Under California Family Code Section 1101(h), when a spouse deliberately conceals community property, the court can award the entire value of the concealed asset to the injured spouse. This penalty goes beyond the standard 50/50 community property split and serves as a deterrent against fraud.
Statute of Limitations on Discovery
The fact that Thomas discovered the fraud after the divorce was finalized did not prevent him from seeking relief. California allows post-judgment claims for asset concealment, and the court had jurisdiction to reopen the property division based on the newly discovered evidence of fraud.
What This Means for Your Divorce
- →Hiding assets during divorce is not just unethical; it can result in losing the entire concealed amount rather than just half
- →Courts take mandatory disclosure obligations extremely seriously and impose severe penalties for violations
- →Fraud in divorce proceedings can be discovered and punished even years after the divorce is finalized
- →A forensic accountant or thorough financial discovery process can protect you from a spouse who may be hiding assets
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This article is based on publicly available court records, news reports, and legal analysis. It is provided for educational purposes only and does not constitute legal advice. No attorney-client relationship is created by reading this content.
Divorce laws vary by jurisdiction. Always consult a licensed attorney in your area before making legal decisions.