In his ruling, Onondaga County Court judge Joseph Fahey said the deadline to file the charges had passed, Syracuse.com reported Tuesday.
Fahey upheld other charges against Andy Ashkar, 34, and Nayel Ashkar, 36. The brothers are accused of taking a scratch-off ticket from a customer at their father's convenience store in October 2006.
Although the customer had won $5 million, the brothers told him he had won $5,000. They gave him $4,000, taking $1,000 as a fee, authorities charged.
Because the brothers waited until March 2012 to claim the winnings from the ticket, prosecutors had claimed the five-year statute of limitations had not expired.
Fahey ruled the prosecution claim was "unsupported by law." While evidence had established the theft had occurred in 2006, the crime would have had to be prosecuted within five years, he said.
The judge upheld the rest of the indictment, which includes fourth-degree conspiracy charges. Andy Ashkar also faces a charge of criminal possession of stolen property in the first degree.
The brothers' father, Nayef Ashkar, was indicted on conspiracy charges in May 2012.
Ray Liotta sues skin care company over use of likeness
NBC reportedly holds celebs hostage to Jimmy Fallon's show