And the real Lotto winner is … that man at the cash register

When backpackers Caroline Day and Mei-Yin Lee discovered they had won Lotto they rang home from the newsagency. It was after one in the morning in Britain but Ms Day wanted to share the news with her mother.

During that joyous phone call, they calculated they had won about £220,000.

But three weeks later when Dr Lee rang NSW Lotteries to inquire about the money, a "bold" fraud by an employee at the newsagency came to light - and it would be another 27 months before the pair saw their money.

In an email to the Herald from her home in Britain, Dr Lee - an Australian citizen from Perth - said she was "over the moon" that their long legal battle with NSW Lotteries had been settled and that changes had been made to the way claims were processed.

On January 4, 2005 Dr Lee and Ms Day presented their Lotto ticket at the World Square Newsagency Bookshop. A friend took their photo with the ticket before they handed it in and filled in a claim form.

After the transaction, the employee who had served them, Chrishartato Ongkoputra, known as Chris Ong, substituted their claim form for one of his own. He then sent his form, and their winning ticket, to NSW Lotteries.

"The stars really aligned for him," said the barrister James Stevenson, SC, who is representing newsagents Michael Pavellis and his partner Sheila Urech-Tan.

Mr Ong knew that NSW Lotteries would not pay out for 14 days. He told his boss he was having visa problems and needed to return temporarily to Indonesia. He gambled that the backpackers would not chase up their win until after he had left the country.

"The [newsagents] have been betrayed by a person they had no reason to doubt. They now find themselves in the position of being sued for half a million dollars plus costs by an agency of the government," Mr Stevenson said.

At the time of Mr Ong's fraud, NSW Lotteries was already reviewing its security following a similar fraud at an agency in Croydon. A report by NSW Lotteries, tendered in evidence, said it needed to address the problem with unregistered tickets to protect the corporate image and customer confidence.

Dr Lee is just happy the matter has been settled.