Former Kansas City woman is accused of stealing $480,000 from lottery winner

A federal grand jury has indicted a former Kansas City woman for allegedly stealing $480,000 from a woman who had won about $2 million from the Missouri Lottery.

Prosecutors also said Freya Pearson, who now lives in Laguna Niguel, Calif., owes the government an additional $198,837 in back taxes and fraudulently obtained housing benefits.

The victim, whom the indictment described as “financially unsophisticated,” won about $2 million from the lottery in 2008, according to the indictment, and spent some of the money to purchase two houses. The rest she put into an annuity that would have paid her about $30,000 a year for the rest of her life.

Pearson, now 41, allegedly met the victim in January 2010 and soon persuaded her to withdraw money from the annuity and put it into Pearson’s nonprofit company, Recidivism at Work, which she had founded the previous September.

Pearson’s only income at the time was child support and Social Security benefits for one of her children, the indictment said. She also never disclosed the money when she applied for public housing benefits for a home in Kansas City.

“Pearson used the $480,000 to gamble, travel, buy cars, clothes and furniture, and pay rent,” the indictment said. “No identifiable money was used for the nonprofit entity, nor for any business purpose.”

Grand jurors returned the secret indictment Tuesday. It was unsealed Friday after Pearson’s initial court appearance.

This story was originally published October 31, 2014 at 5:01 PM.