A McLennan County jury decided Thursday that Stephen M. Cutbirth and Lacey Newman had an agreement to split potential gambling winnings before Newman used Cutbirth’s money to hit a $1.24 million slot machine jackpot four years ago in Louisiana.
A 414th State District Court jury of nine women and three men deliberated about three hours Thursday before siding 11 to 1 with Cutbirth, who Lacey Newman and her husband alleged defrauded them out of half of the jackpot winnings.
Verdicts in civil trials can be returned if at least 10 jurors agree. At least eight jurors declined to discuss the case as they left the courthouse.
Cutbirth, 54, who said he asked Lacey Newman to go on the all-expenses-paid trip with him in an effort to cheer her up over her impending divorce, was beaming after the verdict. He said he has been back to the Bossier City casino with friends since the controversy with the Newmans arose and he isn’t going to stop now.
“I ain’t going to change nothing I do,” Cutbirth said. “Just because there is one bad apple, doesn’t mean there’s two.”
Lacey Newman’s husband, Jonathan Newman, a Lacy Lakeview police officer, declined comment after the four-day trial. Jonathan Newman had filed for divorce when his 32-year-old estranged wife decided to accept Cutbirth’s offer to accompany him to Louisiana.
Cutbirth said he knew Lacey Newman, a dog groomer, had no money and offered to pay for the entire trip and to split any gambling proceeds either won 50-50 with the other.
Lacey Newman testified that there was no such agreement before she hit the button on the winning “Wheel of Fortune” slot machine, although she went to a lawyer’s office with Cutbirth when they returned to Waco and signed a document agreeing to split the $868,000 they got in a cash-buyout option between them.
Cutbirth and Lacey Newman asked casino officials to put the winnings in Cutbirth’s name so her husband wouldn’t find out. However, the casino wouldn’t do that because Lacey Newman was playing the machine when it hit the jackpot.
Jonathan Newman found out about his wife’s winnings and sued his wife and Cutbirth, alleging they conspired to defraud him out of his rightful community property in the divorce. Later, however, the Newmans reconciled and Lacey Newman joined her husband in suing Cutbirth for his half of the winnings.
Throughout the four-day trial, it became clear that neither Cutbirth nor the Newmans have any of the money left. Jonathan Newman testified he and his wife owe $500,000 to the IRS in back taxes, penalties and interest. Because the winnings were placed in her name, the IRS taxed the Newmans for the entire amount, a dispute they still are trying to resolve.
Lacey Newman testified that she bought a $63,000 truck for herself the day she returned from Louisiana and a $41,000 truck that she gave to a friend. She later asked the friend to give the truck back, which he did.
Cutbirth said he paid $65,000 in taxes on his winnings and gave some money to his children. He said he sank most of the rest into equipment upgrades for his custom hay-baling business.
In arriving at its verdict, the jury was asked to decide if Cutbirth’s financing Newman’s gambling amounted to a “gift” or if there was an “agreement made to split any gambling winnings before the jackpot was won.”
Jurors answered there was an agreement and never got to the second question about whether Cutbirth committed fraud against the Newmans’ community estate.
“The jury answered the question, and I respect the jury system,” said Derrel Luce, who represented Jonathan Newman. “I think there was a fraud involved, but with technicalities involved with separate property, community property, it gets real complicated when you see the roads you have to walk through after you have already let somebody get their hands on your money. When you have an $800,000 check in your pocket and you let somebody talk you out of it, it is hard to get it back.”
Ken Rolston, who represented Cutbirth, said Cutbirth was just trying to help Lacey Newman get through an unsettling time in her life and said she repaid him by greedily trying to take his half, too. Lacey Newman “was scheming from the get-go to hide this money from her husband,” Rolston said, asking why she would agree to split the money with Cutbirth if there was no prior agreement to do so.
“I think the verdict was based on the evidence and it was just,” Rolston said. “I think the jury did the right thing in this case. It’s like I told the jury, no good deed goes unpunished. Steve was just trying to help her.”
Jurors did not get to the second question, but in her instructions to the jury, Judge Vicki Menard wrote, “If a married person invests or bets money belonging to them as their separate property in a gambling venture, any winnings from that venture become the community property of the marriage.
“This fact remains true even if the married couple has filed for divorce and is separated until the divorce becomes final and a divorce decree dividing the community estate of the marriage is signed and entered by a judge. You are further instructed that the spouse of a person who won money in a gambling venture has an ownership interest in the community property gambling proceeds.”
Lacey Newman admitted in testimony Monday that she lied while under oath in depositions in her divorce case before she and her husband reconciled. However, she said she was telling the truth at trial.