On February 15, 1992, the Virginia State Lottery drew six winning numbers on live television: 8, 11, 13, 15, 19, and 20. The $27 million jackpot had just been won, but officials were stunned to discover that one person had also secured six second prizes, 132 third prizes, and roughly 135,000 minor prizes worth an additional $900,000. That person was Stefan Mandel, a Romanian economist and mathematician who had just pulled off what many considered impossible: buying every possible number combination in the lottery. Mandel’s story began decades earlier in Romania, where life under Soviet control in the 1960s was marked by widespread poverty and shortages.
Despite his education, Mandel earned a meager salary of about $100 per month, barely enough to cover basic living expenses. Facing dire financial circumstances, Mandel chose a third option beyond illegal activities or fleeing the country. He turned to the lottery, not as a gambler, but as a mathematician studying probability. Drawing inspiration from the works of 13th-century mathematician Leonardo Fibonacci, Mandel spent years developing what he called “combinatorial condensation,” a system designed to reduce the number of ticket combinations needed while still covering all possible outcomes.
His guiding principle was simple: mathematics, properly applied, could guarantee a fortune. Mandel’s strategy required identifying lotteries where the jackpot was at least three times the cost of buying every possible combination. If a lottery required picking six numbers from 1 to 40, there were 3,838,380 possible combinations. If the jackpot reached $1.
5 million and tickets cost $1 each, purchasing every combination would guarantee a winning ticket. To fund these operations, Mandel formed syndicates of investors who each contributed relatively small amounts. To handle the logistical nightmare of filling out millions of tickets in the pre-digital age, he used printing technology to pre-populate tickets with every combination. His first success came in Romania, where he and a syndicate of four friends won about 72,000 lei, roughly $20,000.
After paying investors, Mandel walked away with approximately $4,000. He used some of his winnings to bribe officials and secure safe passage out of the country. In the 1970s and 1980s, Mandel relocated his operation to the United Kingdom and then Australia. There, with the help of computers and printers, his syndicate won 12 lotteries and collected 400,000 smaller prizes across Australia, including a significant $1.
1 million win in 1986. Australian lottery authorities eventually changed the law, disallowing a single person from covering every possible combination. The change closed the loophole Mandel had exploited, forcing him to look elsewhere. His search led him to the United States.
After evaluating lotteries in Massachusetts, Arizona, and other states, he settled on Virginia. The Virginia Lottery was relatively new, allowed unlimited ticket purchases, and permitted players to print tickets at home. Crucially, its numbers only ranged from 1 to 44, meaning there were just 7,059,052 possible combinations compared to 25 million or more in other states. Mandel set up an agency under a shell corporation and established a trust called the International Lotto Fund.
He convinced 2,524 people to buy a 10-year whole life insurance policy with a $44,000 annual premium, then used that money to buy each person a stake in the lottery. In a Melbourne warehouse, he set up 30 computers and 12 laser printers, hiring 16 full-time employees to print millions of pre-populated tickets. The process took three months. The resulting ton of paper was shipped to the United States at a cost of $60,000.
On February 12, 1992, the Virginia Lottery jackpot hit $15. 5 million, exceeding Mandel’s required threshold. The next draw was scheduled for Saturday, leaving just 72 hours to execute the plan. Mandel hired the accounting firm Lowe Lipman, which transferred $9 million of investor funds to Crestar Bank in Boston, which then issued $10,000 cashier’s checks.
He also struck advance deals with Virginia-based retail chains to buy tickets in bulk. For on-the-ground coordination, Mandel turned to an associate named Anithalee Alex. Alex, who had just come out of bankruptcy court burdened with $400,000 in debt and 16 maxed-out credit cards, was desperate for the opportunity. He converted a hotel room in Norfolk into a command center before moving to a nearby business park.
There, Alex met with a team of 35 couriers, mostly certified accountants, each entrusted with bundles of 10,000 lottery tickets wrapped in cellophane and accompanied by stacks of $10,000 cashier’s checks. For two straight days, the couriers descended on 125 gas stations, supermarkets, and convenience stores throughout the region. Store clerks initially balked at the sheer number of tickets, but there was nothing technically illegal about an individual purchasing thousands of tickets. “We thought they were nuts,” a local gas station proprietor later admitted, “but if someone comes up and says they want to buy 700,000 lottery tickets, we’re not going to chase them away.
”
By Saturday evening, the team was nearing completion when a chain that had agreed to sell tickets in bulk got overwhelmed and quit in the final hours. That left 140,000 tickets, representing 700,000 combinations, unprocessed. When the entry deadline arrived, only about 1. 24 million of Mandel’s 1.
4 million tickets had been processed, covering 6. 4 million of the 7 million possible combinations. His foolproof plan, which relied on securing every possibility, was in jeopardy. Winning would come down to luck.
Mandel also faced the risk of multiple winners diluting the jackpot. At 11:20 p. m. on February 15, the numbers were drawn on live television.
In a nearby warehouse, Alex and his team waited in tense silence. Then came a victorious shout. They had won. The winning ticket, purchased at a Farm Fresh in Chesapeake, had been processed in the twilight hours.
“Everybody was six feet off the ground,” Alex later said. “It was the most incredible thing in the world. ”
Mandel sent a message to his 2,524 investors: “One of our target lotteries dug jackpot to our required level. We entered and won the $27,351,142 jackpot and $900,000 in secondary prizes.
” The winnings were to be paid out in 20 annual installments of about $1. 03 million. But Virginia lottery officials had other plans. Although completely legal under both U.
S. and Virginia state law, Mandel’s feat was interpreted as an attempt to cheat the traditional system. Virginia Lottery director Ken Thorson told the press, “It is an opportunity for the common man to spend a small sum for the possibility of a higher prize. We never anticipated a group trying to make such a large purchase.
”
Mandel was subjected to an investigation involving 14 international agencies, including the CIA, FBI, IRS, National Crime Authority, and Australian Securities Commission. He was accused of fraud and manipulation, though authorities raised questions about the ethics of exploiting loopholes rather than the legality of his actions. Neither Mandel nor the International Lotto Fund was found guilty of any wrongdoing. The Virginia State Lottery eventually released his winnings to him.
Each investor who had bought into the lottery through the life insurance policy made out with about $1,400. Some were not pleased. “Stefan Mandel is not only irrelevant, he’s toxic,” a disgruntled investor later said. Mandel paid himself a one-time consultancy fee of $1.
7 million and reportedly sold the annuity on the 20-year payout to a U. S. insurance company for a lump sum of $14 million. After overhead costs of $5.
5 million for tickets and $500,000 in expenses, he was left with a substantial sum. Records show he funneled the cash into a Hong Kong-based account managed by his brother-in-law. Just a few years later, in 1995, Mandel declared bankruptcy, his ventures beyond the lottery having proven less successful. Mandel spent the next decade running various investment schemes, one of which earned him a 10-year jail sentence in Israel for the alleged non-publication of a prospectus in a cooperative society.
His attorney said the conviction was later overturned and that Mandel never spent a single day in prison. Today, Mandel lives quietly at a beach house on a remote tropical island in Vanuatu, off the coast of Australia. Speaking to a Romanian newspaper in 2012, he said, “I’m a man who takes risks but in a calculated way. Trimming my beard is a lottery.
There is always the possibility that I’ll cut myself, get an infection in my blood, and die. But I do it anyway. The chances are in my favor. ”
As for his associate Alex, he dropped off the grid and keeps a low-profile life somewhere around Illinois.
“You could not have written a script as good as this,” he recalled years later. Mandel has never revealed the precise details of his algorithm, telling an inquiring reporter in 1992, “That would be like Coca-Cola revealing the recipe. ” His legacy lives on in U. S.
legislation: all 44 states that operate lotteries have since enacted laws to prevent a replication of his strategy. Individuals are no longer allowed to buy lottery tickets in bulk or print them at home.