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Former W.V. Lottery inspector admits lying to feds

Nov 17, 2010, 10:45 pm

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West Virginia Lottery

A former inspector with the West Virginia Lottery Commission admitted Wednesday that she lied to investigators about taking money from a former state delegate who ran an illegal gambling ring in West Virginia and Kentucky.

Carolyn A. Kitchen, 55, of Chapmanville, admitted that she lied to investigators with the Federal Bureau of Investigation and the Internal Revenue Service when they questioned her about her involvement with Joe C. Ferrell in February 2008.

Among other things, they asked her if she took money from Ferrell, a longtime Logan County delegate who owned Southern Amusement Co., a company that provided video lottery machines to bars and other venues.

"At that time, I lied to them, knowing that I had taken money," she said Wednesday.

Ferrell, 63, pleaded guilty to racketeering and tax fraud charges last month. He said he helped Kitchen, whom he had known since she was a teenager, get her job with the Lottery Commission, knowing that she would bend the rules for the machines owned by his company.

"He would call and ask me to come out after hour to fix [Southern Amusement's] video lottery machines," Kitchen said Wednesday.

Kitchen, who agreed to a plea deal with federal prosecutors in May 2008, knew that the federal agents were investigating Ferrell when she lied to them three months earlier.

She faces up to five years in prison when sentenced by U.S. District Judge John T. Copenhaver Jr. on Feb. 23.

"She was always around to do favors for us," Ferrell said of Kitchen during his plea hearing. He said he periodically gave her money, including $2,000 in June 2007 when she wanted to buy a car, and meals and other gifts.

In exchange, she was expected to be immediately available if he needed access to sealed parts of the gambling machines, and provide favorable reports to the Lottery Commission, where she worked between 2004 and 2007, according to court records.

Ferrell became a major video machine owner in 1995, when he bought Southern Amusement Co. from the family of Earl Ray Tomblin, then a state senator and now acting governor.

As part of Ferrell's plea deal, federal prosecutors dropped charges that he bought votes and bribed Logan's mayor and the county's sheriff-elect, both of whom have been convicted of election-related charges.

In June 2005, federal investigators raided Southern Amusement Co.'s Logan headquarters, seizing records related to both gambling and election fraud.

In January 2006, after he was linked to a federal vote-buying probe that resulted in convictions of multiple elected officials in Southern West Virginia, Ferrell announced through his attorney that he would not seek re-election. Ferrell, who pleaded guilty in state court in 1992 to illegally funneling $58,000 in cash to campaigns in Logan, Boone and Lincoln counties, served a total of seven terms in the Legislature.

Charges remain pending against former Southern Amusement employee Mark Anthony Cantrell, who had previously been charged with lying to federal investigators about removing money from video machines. He faces racketeering and gambling charges, as well as charges that he helped Ferrell pay another employee in cash so that he could work and continue to collect Social Security benefits.

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