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FOR IMMEDIATE RELEASE:

MAY 18, 2006

MAN INDICTED FOR $228, 786 FRAUD RELATED TO SCIENTIFIC GAMES INTERNATIONAL INC.

RALEIGH - United States Attorney Frank D. Whitney announces that this afternoon a federal grand jury sitting in the Eastern District of North Carolina returned a Bill of Indictment against KEVIN L. GEDDINGS, charging him with five counts of honest services mail fraud (18 U.S.C. §§ 1341 and 1346), four counts of honest services wire fraud (18 U.S.C. §§ 1342 and 1346), and aiding and abetting the same (18 U.S.C. § 2), and seeking forfeiture of assets involved in mail and wire fraud (18 U.S.C. § 982 and 21 U.S.C. § 853).

The Indictment alleges that defendant GEDDINGS, from February 2001 to September 2005, received revenue, directly or indirectly, in the amount of $228,796.18 from Scientific Games International, Inc. (“Scientific Games”), a corporation operating state lotteries and a bidder for the North Carolina Education Lottery, or one of Scientific Games’ subsidiaries or affiliated entities. The Indictment further alleges that GEDDINGS, as a candidate for appointment to the North Carolina Lottery Commission (“Lottery Commission”) and as a Commissioner on the Lottery Commission, devised and intended to devise a scheme and artifice to defraud the State of North Carolina and the citizens of North Carolina of their intangible right of his honest service by failing to disclose his conflict of interest arising from his nearly five year financial relationship with Scientific Games relating to state lotteries in South Carolina, Tennessee and Oklahoma in addition to North Carolina. According to the Indictment, on or about October 6, 2005, the day before he mailed his North Carolina Statement of Economic Interest on October 7, 2005, GEDDINGS or an associate deposited a check for $9,500 from Scientific Games into a bank account of Geddings & Phillips Communication, LLC, an entity wholly owned by GEDDINGS and his wife. On October 11, 2005, he telefaxed a revised North Carolina Statement of Economic Interest, and again failed to disclose this conflict of interest.

The Indictment also alleges that GEDDINGS intentionally concealed his relationship with Scientific Games because he knew it would disqualify him from service as a Lottery Commissioner. In an email to his executive assistant on September 26, 2005, GEDDINGS wrote; “Pls never acknowledge by phone that sci games is a client . . ..” The Indictment also alleges that, when Scientific Games began cooperating with federal and state investigators in October 2005, two Scientific Games’ representatives spoke with GEDDINGS and asked him if he had listed the work he had done for Scientific Games in 2005 on his Statements of Economic Interest. GEDDINGS acknowledged to the two Scientific Games’ representatives that, while he had disclosed some work for an affiliated entity of Scientific Games, he had not disclosed his payments from Scientific Games because if he had so disclosed, he would not have been appointed a Commissioner.

This indictment is a part of an ongoing investigation by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigation Division, the North Carolina State Bureau of Investigation, and the United States Attorney’s Office, in cooperation with the Wake County District Attorney’s Office. The North Carolina Division of Alcohol Law Enforcement has also participated.

Senior Assistant U.S. Attorney Dennis Duffy and Executive Assistant U.S. Attorney John Stuart Bruce are handling the case for the U.S. Attorney’s Office.

An Indictment is merely a charge and is not evidence of guilt. Defendant GEDDINGS is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt. A trial date has not yet been set. This indictment does not allege wrongdoing by anyone other than defendant GEDDINGS.

News releases are available on the U. S. Attorney’s web page at www.usdoj.gov/usao/nce within 48 hours of release.

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