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Arizona Republic, AZ: From Porsches to bankruptcy (lottery winner who made the mistake of investing in Shell gas stations)

Jul. 16, 2006 12:00 AM

EXTRACT: He lost more than $2 million of his lottery winnings and filed suit against Shell for practices that he says were aimed at muscling independent operators like him out of the business. He settled in 2002 for pennies on the dollar for his emotional distress.

THE ARTICLE

Winner: Shefik Tallmadge. Year: 1988. Jackpot: $6.7 million, $335,000 each year for 20 years.

When Tallmadge was 29, he became the biggest winner in the Pick lottery at the time.

He bought a $60,000 nougat-brown Porsche 911 Carrera convertible the day he got his check, quit his $10.75 per hour job at Yuma Proving Ground and took his mother and his sister on a luxurious world tour to Honolulu; Bangkok, Thailand; and Sierra Leone.

Tallmadge transferred from community college to Northern Arizona University and completed a degree in political science. He met and married a pharmacist from Yuma. They moved to California, bought a house on the beach in Encinitas and then a huge house in Escondido.

But Tallmadge soon got into trouble with his California taxes. He moved to Florida, which has no state income tax, and bought another beach house. He tried out law school in Michigan but came back to Florida after the birth of his second child to be a stay-at-home dad.

In 1998, he decided to cash in the rest of his lottery payments through a private company, buying an even bigger waterfront home and investing millions in four Shell gas stations.

But his stations quickly began losing money. He had to sell Porsche No. 7 to stay afloat and the house on the beach. By 2000, Tallmadge had sold or given up his gas stations.

He lost more than $2 million of his lottery winnings and filed suit against Shell for practices that he says were aimed at muscling independent operators like him out of the business. He settled in 2002 for pennies on the dollar for his emotional distress.

Last year, while battling the Internal Revenue Service over back taxes on his lottery winnings, he filed bankruptcy to save the smaller house he had left. He is a stay-at-home dad again and plays the Florida Lottery every week, betting on those same numbers that struck it big in Arizona.

“I entered into the big shark pool, and I was the little minnow,” Tallmadge says of his lottery experience.

“The lottery did change my life. What I did with it afterward was the problem.”

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1 Comment on “Arizona Republic, AZ: From Porsches to bankruptcy (lottery winner who made the mistake of investing in Shell gas stations)”

  1. #1 Royal Dutch Shell Plc .com
    on Jul 16th, 2006 at 02:15

    Unfortunately there is nothing new about Shell tricking people into investing their time and money in running shell gas stations believing that they are dealing with an ethical oil company.

    Countless numbers of people have been ruthlessly exploited by Shell only to ultimately be thrown out of their sites once their funds and enthusiasm has been exhausted as a result of unfair agreements and predatory business practises by Shell.

    We first became aware of Shell’s disgraceful treatment of Shell licencees over a decade ago when we founded the Shell Corporate Conscience Pressure Group. The inspiration for the name of the pressure group arose from an article in the September 1994 issue of the Shell “Chairman’s Bulletin” sent to Shell shareholders, which claimed a culture of “corporate conscience” at Shell.

    Our membership included Shell suppliers, fellow Shell shareholders and Shell retailers – amazingly nearly 15% of Shell UK retailers joined the pressure group.

    Several hundred Shell retailers participated in our “business ethic” surveys about Shell. We published the results in successive monthly whole page notices in the forecourt trade press. All responses were opened under the supervision of an independent solicitor who provided an Affidavit verifying the results, which were devastatingly bad for Shell.

    89% of respondents said that they would not recommend any petrol retailer considering a brand change to switch to Shell.

    75% of the Shell stations that participated were of the opinion that Shell was unethical, incompetent, and greedy.

    Shell never did take up our challenge to commission and publish the results of independent research, using precisely the same questions and offering respondents GUARANTEED anonymity.

    We also received many letters from Shell stations complaining bitterly about the business practices of Shell. Here is a selection of quotes from some of the letters: –

    “Extremely bad company”

    “I believe the current regime is totally immoral”

    “We have serious concerns about Shell’s ethical conduct”.

    “The fickle nature and lack of honour within our negotiations were a shock to ourselves coming from a large company… We would hope this letter may help you and serve as a warning to others contemplating any form of activity with this company”.

    “You are not alone in being steamrollered by this company”.

    It is clear from the news stories which emerge from time to time from the USA that Shell uses the same tactics in that market.

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