The people got paid as according to their voluntary agreements, and they actually got paid much better than if they participated in the government sanctioned lottery.
Maybe I've missed something but afaik the ~19 million is still unreturned.
Yeah, you're missing, I think, the whole point of the indictment. Look at the statements from the postal inspector:
According to the indictment the victims were purchasing positions in tickets for lotteries that would be grouped together or pooled to buy larger blocks of tickets thereby increasing their chances of winning. Funds received from victims were not used to purchase tickets, but to pay winnings to other victims, to fund the scheme and to benefit the defendants. Victims were sent checks falsely represented as lottery winnings, however the amount of the alleged winnings was far less than the amount the victim had sent in.
The total amount collected from selling the tickets was $25 million. That's not net, it's gross, and it's what the government projects as "the fraud" as. From the perspective of the government, any money sent to the lottery scheme is fraudulent. Their argument is that because the lottery company was representing themselves as being a pass through to sanctioned tickets, that all of the people were defrauded. Like I said, maybe they were, maybe they weren't. I don't really know because the documents don't detail any evidence that indicates this either way. I'd like to see what this company actually sent to people in their advertising in order to make a judgement. But even assuming that this is the case, it seems to me that they made these statements in order to evade prosecution while running an illegal lottery.
But what is clear is that they were running a lottery and they were paying the people who were participating according to their positions. Some people might be hung up on the statement that "the amount of the alleged winnings was far less than the amount the victim had sent in" but
that's how a lottery works. The payouts are less than the draw. This wasn't a charity, it was a for profit business.
So this can come down to a debate as to whether or not lotteries themselves are moral. I personally don't care to debate this: I feel they are moral as long as the payouts are as agreed. I respect and understand the arguments towards the opinion that all lotteries are immoral. I cannot accept a position that lotteries are moral when run by the government, but immoral when run by individuals. Whatever your opinion on lotteries is, though, judgement of Sonny should be made based on the fact that he was part of an illegal lottery, and not that he "defrauded little old ladies." Little old ladies know what they are getting into when they buy a lottery ticket.