OKLAHOMA CITY – The state Lottery Commission is seeking to have a debt of nearly $15,000 the agency alleges it is owed by a vendor to be excluded from his bankruptcy proceeding. Muhammad Riaz, of Edmond, filed for Chapter 7 bankruptcy on Sept. 24, 2019, in the U.S. Bankruptcy Court for the Western District of Oklahoma.
In a petition filed on Dec. 20, 2019, the state Lottery Commission related that Riaz, as owner of Zara, Inc., was authorized by the commission in early 2018 to sell lottery tickets. Zara, Inc., in Oklahoma City, was registered with the Oklahoma Secretary of State’s office on Jan. 10, 2018, records reflect. In his contract with the commission, Riaz agreed that he “is responsible for all proceeds from the sale of Oklahoma lottery tickets,” and by law those proceeds “shall constitute a trust fund in favor of” the Lottery Commission, the plaintiff claims. In the contract, Riaz agreed to maintain a separate bank account for lottery proceeds and to transfer all monies due from his retailer’s account each week. However, Riaz “breached his fiduciary duties” by failing to deposit his lottery proceeds into a separate account and to remit those funds to the commission, the agency alleges. The Lottery Commission accuses Riaz of “either willfully, recklessly or negligently” failing to remit to the agency $14,890 in proceeds from lottery ticket sales. The commission urged the court to rule against Riaz and declare that the money he owes the agency, plus 6% annual interest, is “excepted from discharge” and must be paid. In Chapter 7 bankruptcy, a judge relieves the applicant of his obligation to pay some or all of his debts