Anthony Palermo has been receiving $1,000 a week since he won on the New York State Lottery’s “Win for Life” scratch-off game 14 years ago.

The 51-year-old Albion resident might continue collecting his winnings from a prison cell, if he’s convicted on three felony charges for allegedly cashing in on more than $4,000 in public assistance benefits he wasn’t entitled to, authorities in Orleans County reported Thursday.

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Palermo was charged with welfare fraud, grand larceny and offering a false instrument for filing. He was arraigned Thursday afternoon before Albion Town Justice Gary Moore and released on his own recognizance pending an April 17 return to court.

Authorities said Palermo was arrested following an investigation by Orleans County Fraud Investigator Marie Snyder and county sheriff’s officials that showed he allegedly applied for public assistance last September and began receiving benefits.

Palermo received more than $4,000 in benefits dating back to last fall from Medicaid and the Home Energy Assistance Program, according to Orleans County officials.

Snyder received a tip that Palermo recently attempted to apply for Emergency Cash Assistance benefits and learned he had been a 1998 lottery winner who began collecting his $1,000 per week winnings on the $1 million guaranteed minimum prize. He is believed to have collected nearly $700,000 in that time, officials said.

“It’s my job to make sure that people who attempt to defraud the taxpayers of Orleans County are stopped and are forced to either repay the money or face the consequences,” Snyder said. “This is what we do every day.”

It remained unclear Thursday what may have motivated Palermo to seek additional money by allegedly defrauding public assistance programs.

Public records show, however, that last August, Palermo may have sold future lottery winnings to Stone Street Capital, a Maryland financial firm that specializes in “lump sum” payouts.

The business, among other things, provides lump sum payments for “for lottery prizes, corporate contest prizes, and slot jackpots that are paid out over time,” according to its web-site.

Thomas Kuryla, Orleans County’s commissioner of social services, said changes in state law governing public assistance contributed to the problem.

“Local districts have been placed in a very precarious position as the result of the state’s lenient rules and regulations, particularly the fact that Medicaid applicants no longer must appear in person to obtain benefits,” Kuryla said.

Added Dave Callard, Orleans County legislative chairman: “This is just one of the more egregious examples of the kinds of things that our employees are dealing with all the time.”

Orleans County Sheriff Scott Hess said, “We are working with the Department of Social Services on a daily basis to see that taxpayers are not being taken advantage of. It is important that the citizens of Orleans County know that their local officials take their responsibility as stewards of taxpayer money very seriously.”

When state investigators demanded last year to see personal tax returns filed by Eddie Calderon-Melendez, the founder and chief executive of a troubled network of charter high schools in Brooklyn, he produced them. One problem, according to the investigators, was that those state tax returns were falsified and had never been filed.

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Then, when the investigators studied the books of one of the schools, Williamsburg Charter High School, they found that Mr. Calderon-Melendez had used a school credit card to pay for parts of a European vacation, including accommodations at a Paris hotel and some expenses in England, they said. On Thursday, a grand jury in Brooklyn indicted Mr. Calderon-Melendez on 11 felony counts, including tax fraud, grand larceny and falsifying business records.

“While earning a six-figure salary funded largely by taxpayer dollars, the defendant robbed the State of New York of much-needed revenue when he failed to pay his taxes for six years in a row,” Eric T. Schneiderman, the state attorney general, said in a statement.

“He then compounded his crime,” Mr. Schneiderman added, “by creating false evidence to throw investigators off his trail.”

Mr. Calderon-Melendez was arrested on Thursday morning and arraigned in the afternoon. He pleaded not guilty and was released without bail. A lawyer for Mr. Calderon-Melendez, Jeffrey A. Udell, did not respond to requests for comment.

The case is the first brought against the operator of a charter school by Mr. Schneiderman since he took office last year. The charges grew out of an investigation begun last year that led school officials for the city and state to start shutting down Williamsburg Charter and two other charter schools managed by an organization that Mr. Calderon-Melendez founded.

Mr. Calderon-Melendez, 48, founded Williamsburg Charter in 2004. Five years later, he created the Believe High School Network, which managed Williamsburg Charter and two new high schools in Brooklyn, Believe Northside and Believe Southside. From 2005 through 2010, Mr. Calderon-Melendez received about $1.4 million in compensation, more than $500,000 of it in 2009 alone, according to the indictment.

Almost all of the money to operate the three schools came from public financing, according to investigators. Mr. Calderon-Melendez failed to pay at least $70,000 in state and city taxes on his income during those years, the authorities said.

He also spent about $1,800 on personal expenses in Europe, which he charged to a school credit card, then had employees falsify school records to cover up that spending, according to the indictment. No other employees of the schools or the Believe network have been charged.

Mr. Calderon-Melendez’s management of the schools has drawn scrutiny for some time. The city’s Education Department placed Williamsburg Charter on probation in September. In January, when the department announced plans to revoke the school’s charter, the director of the city’s charter school office said that Mr. Calderon-Melendez had driven the school into debt while paying himself a large salary and hiring outside consultants. City officials said he had misspent grant money and bullied some board members into leaving.

At a hearing in March, a lawyer for Williamsburg Charter said that Mr. Calderon-Melendez had been fired and that conflicts of interest among the board members had been resolved. “I want to make it very clear, chancellor, that Eddie is gone,” the lawyer, Ellen K. Eagen, told Kathleen Grimm, the deputy chancellor who led the hearing.

But the department was not persuaded to reconsider closing the school. The other two schools in the Believe network were also targeted in January for closing, but Northside Charter received a reprieve from the state in March.