A Mississauga man is facing fraud and theft charges for cashing in a $5.7-million winning lottery ticket that he allegedly stole from his customers at a Toronto variety store.

The OPP have also charged Hafiz Zulqarnain Malik, 60, with possession of the proceeds of crime and they have frozen $5 million in assets he apparently bought with the lottery winnings.

Police say Malik purchased three new vehicles, a mansion in an upscale Mississauga community and made cash investments since claiming the Lotto 6/49 jackpot in January, 2005.

OPP Detective Inspector Paul Beesley said Malik was the first person charged as a result of a broader investigation into what has been described as insider lottery winners. They involve Ontario lottery retailers, employees or relatives who are suspected of making bogus claims to the Ontario Lottery and Gaming Commission between 1999 and 2006.

Beesley said the OPP has narrowed its focus on four cases where the winners claimed prizes in the million-dollar range.

The crackdown was prompted by Ontario Ombudsman Andre Marin who issued a special report in March slamming the OLG for ignoring allegations that retailers were winning a disproportionate number of lottery prizes. Beesley told reporters at a press conference yesterday that Malik cashed a ticket that belonged to four Toronto residents who had purchased it somewhere in southern Ontario in June, 2004. He said they took it to a store that Malik owned in Toronto and were told that it wasn't a winner.

It's alleged the storekeeper took the ticket from them and cashed it about six months later.

Beesley said the legitimate ticket owners -- Aurora Pincivero, Lorraine Teicht, Silvana Pincivero and Paul Carlisi -- didn't realize they'd been hoodwinked until this summer when they checked their ticket number on a OLG website. They knew the number because they always used the same combination.

Police have been investigating the case since the summer but Malik appears to have been caught completely off guard. He was to appear for a bail hearing in Toronto yesterday.

Yesterday, the OLG presented a cheque to a lawyer representing the legitimate winners for $5.7 million plus $788,000 in interest the money would have earned since the numbers were drawn in June, 2004.

If Malik is convicted under the proceeds of crime legislation, the judge can order that he forfeit the seized goods to the Crown or that he make restitution.

plegall@thespec.com

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