A Woman Won $1.3 Million in the Lottery Then Lost Every Penny

On December 28, 1996, Denise Rossi won 1.3 million dollars in the California State Lottery - her share of a 6.68 million dollar group jackpot won with co-workers.

Eleven days later, on January 8, 1997, she filed for divorce from Thomas Rossi, her husband of 25 years.

She did not mention the lottery winnings in the divorce proceedings. She consulted the California Lottery Commission about how to hide the payments. She used her mother's address for all lottery correspondence. She disclosed nothing.

The divorce was finalized in April 1997. Thomas Rossi walked away confused about why his wife of a quarter century had suddenly left, but otherwise unaware of what she was hiding.

For three years, Denise collected her annual payments of 66,800 dollars in silence.

Then in May 1999, a letter arrived at Thomas's address. It was from Statewide Funding, a company that purchases future lottery payment streams for a lump sum. The letter was addressed to Denise but had been sent to their old shared home.

Thomas opened it. And discovered everything.

He took her to court. Los Angeles Superior Court Judge Richard Denner found that Denise had acted with "fraud, oppression, and malice" under California law. The penalty was devastating: under California Family Code Section 1101(h), a spouse who hides community assets through fraud can lose the entire asset.

The judge awarded Thomas 100% of the lottery winnings. Every annual payment. Every last cent. Denise received nothing.

The California Court of Appeal upheld the ruling in 2001.

Under California's community property laws, lottery winnings during a marriage are split 50/50. If Denise Rossi had simply told the truth during the divorce, she would have kept at least 650,000 dollars.

Instead, she kept nothing. One letter, sent to the wrong address, cost her 1.3 million dollars.