Lottery Post has been warning of the dangers of computerized drawings for over a decade, and now prosecutors of the mystery Hot Lotto winner from Iowa are looking at the possibility that those warnings have come true.
Prosecutors believe there is evidence indicating a former information-security director for a lottery vendor in Iowa tampered with lottery equipment before buying a Hot Lotto ticket that would go on to win $14.3 million, according to court documents filed Thursday.
The trial for Eddie Raymond Tipton, 51, of Norwalk is set to begin Monday. Tipton was arrested and charged with two counts of fraud on Jan 15.
(See MUSL employee arrested in Hot Lotto jackpot mystery, Lottery Post, Jan. 15, 2015.)
Tipton has been accused of purchasing a Hot Lotto ticket at a QuikTrip near Interstate Highway 80 on Dec. 23, 2010. At the time, Tipton was the director of information security at the Multi-State Lottery Association. His job barred him from playing the lottery or claiming lottery prizes, as stated in Iowa law.
Authorities said Tipton enlisted the help of others to try to claim the $14.3 million prize. They say this included Robert Clark Rhodes II, 46, of Sugarland, Texas, who was arrested by Texas police on two counts of fraud March 20.
At a January press conference announcing Tipton's arrest, authorities said the charges were not based on the premise that Tipton manipulated the lottery outcome. Court documents filed Thursday indicated prosecutors suspect Tipton did tamper with lottery equipment.
"There is sufficient evidence for a jury to reasonably conclude from the evidence that Defendant tampered with lottery equipment," prosecutors wrote.
The prosecution outlined their supposed evidence in a reply to the defendant's motion that requested "all evidence of the tampering theory be excluded." The defense claimed the prosecution's tampering theory "is not factually viable."
The defense argued Tipton could not have edited or accessed the Random Number Generator in December 2010. The motion stated Tipton was in Texas from the afternoon of Dec. 23, 2010 until after New Year's 2011.
The defendant's motion also explained how the RNG computers were in a "locked glass-walled room accessible only by two people at a time and then only on camera" and not connected to the Internet or any network. The defense wrote that the RNG programs do self-checks and outside firms "access them and certify their contents and programs."
"Moreover, the State is aware that there is actually no evidence that Defendant tampered with the RNG computers or program," the defense wrote in its motion.
Prosecutors countered this motion by claiming they have a "prima facie," or at first glance, case that Tipton tampered with lottery equipment.
In their reply to the defense's motion, prosecutors argued that Tipton's co-workers said he "was 'obsessed' with root kits, a type of computer program that can be installed quickly, set to do just about anything, and then self-destruct without a trace." The prosecution claimed a witness will testify that Tipton told him before December 2010 that he had a self-destructing root kit.
Prosecutors also argued in their reply that Tipton was in the draw room on Nov. 20, 2010, "ostensibly to change the time on the computers." The prosecution alleged the cameras in the room on that date recorded about one second per minute instead of how they normally operate, recording every second a person is in the room.
"Four of the five individuals who have access to control the camera's settings will testify they did not change the cameras' recording instructions; the fifth person is Defendant," the prosecution wrote.
It is a reasonable deduction to infer that Defendant tampered with the camera equipment to have an opportunity to insert a thumbdrive into the RNG tower without detection."
Bizarre case leads investigators across the continent
The ticket Tipton has been accused of buying went unclaimed for almost a year. Hours before the ticket was set to expire in 2011, Hexham Investments Trust, a mysterious company incorporated in Belize, tried to claim the prize through Crawford Shaw, a New York attorney.
Lottery officials refused to release the prize because those behind the trust declined to give their identities, as required under Iowa law. Shaw withdrew the claim to the prize in January 2012.
Iowa Lottery officials asked the Iowa Attorney General's Office and Iowa DCI to investigate. The investigation led authorities to a man in Quebec City, Canada, who was listed on a Grantor Trust Agreement as Hexham Investments Trust's trustor and president.
That man, who has not been charged, told authorities two Houston men — Rhodes and an attorney — asked for his help in claiming the lottery ticket in October 2011. The man in Canada said he had past professional relationships with the two men.
The Houston attorney told the Canada man that he "represented a client who had a legitimate claim to the lottery but wanted to remain anonymous," according to a criminal complaint.
Shaw told authorities the Houston attorney, with whom he had a professional relationship for more than 30 years, originally contacted him about the ticket and sent it to him. Shaw then completed the paperwork needed to claim the lottery prize, as instructed by the Rhodes and the Houston attorney.
DCI officials traveled to Houston to talk to the two men in June, but they "did not make themselves available," the complaint said.
At an Oct. 9 news conference, DCI officials asked for the public's help in identifying the man seen in surveillance video purchasing the winning ticket. Authorities said they received a tip on Oct. 13 from an out-of-state employee of the Multi-State Lottery Association that claimed Tipton was the man in the video.
Tipton said in an interview with a DCI special agent Nov. 7 that he did not buy the ticket. He said he was seeing family in Houston, where he grew up, authorities said.
Tipton's cellphone records indicated he was in Des Moines when the ticket was purchased, according to the arrest report. Investigators also discovered Tipton had frequent phone conversations with Rhodes, with whom he attended the University of Houston and worked at a Houston-based company.
Authorities said Tipton rented a silver 2007 Ford Edge, which matched the vehicle of the buyer of the winning lottery ticket, on Dec. 22, 2010.
In December interviews with DCI special agents, other people claimed Tipton's voice and mannerisms matched those of the man shown in the video buying the winning ticket, authorities said.
Authorities arrested Tipton on Jan. 15. He was charged with two counts of fraud, which is punishable by up to five years in prison and a fine of $750 to $7,500.
Texas police arrested Rhodes on March 20. He was also charged with two counts of fraud.
They try to convince us that Hot Lotto draws are audited and yet this guy was able to work around that. I hope people boycott computerized games.
Look at the link I posted in the first paragraph, which leads to the Petition for True Lottery Drawings.
I wrote the text on that page 12 years ago.
The second bullet point describing why computerized drawings are bad is:
Computer hacking is a term that has entered the daily lexicon because of its prevalence within every aspect of computers. Hackers can produce code that goes undetected for long periods of time, and causes unseen problems. Why do the state lotteries think that they are immune from hacking, when some of the most secure computers in the world have been hacked into? Worse, a state employee "on the take" could insert malicious computer code into the drawing process that could specify the exact numbers that are drawn. A crafty programmer could keep this secret for a long time.
Anyone who laughed off that point (and the others) can now watch and learn, as it has probably now taken place (according to prosecutors).
Well.
I was actually considering driving to OK to buy Hot Lotto tics just for the heck of it.
Guess I'll just stay home.
This is so ridiculous.
Balls are the best way.
Well lookie here!!
I have always been against, computerized drawings. This story is every players nightmare for any game of chance.
l am willing to bet that this is not a " one time" occurrence. If thieves can physically break into safe deposit boxes in the UK...
WHATT
NOOO, say it aint so.
Will they offer refunds on this game ?
Don't hold your breath.
On the way to Florida I bought an advance draw of Hot Lotto, in Delaware, no winners.
Then checked LP's state report card and found this was a computer game.
Last trip to Delaware only bought PB and MM.
Ugh, after this mess they should go to ball drawings.
Never trusted a game that was produced by a computer..
HA! I knew it! Bad day for my haters with this news!
Singing a different tune.....How unsurprising.
UH OH!
TODD VADER SPEAKS THE TRUTH
I knew it!
This is about Computerized Drawings- Open your eyes & expand your brain. MM &PB use the balls or can't you tell the difference?
Why am l not surprised.
Todd,
Is Lucky for Life and or Cash 4 Life both RNG or ball games???
The information can be found in two places:
I always said they should put jackpot money if not claimed, back into next draw possible.
It's good thing lottery stopped this guy and crew form claiming the jackpot. but that money belongs to players who built that jackpot and give them a other chance at it.
as for "employee might have"
am with the facts of this case.
This guy has access to comp network running the show.
This guy played and WON. beating millions to 1 odds.......
and was barred form ever playing...............
Ya if lottery tells me there great wall of china level security in place can prevent all attacks...
they must think where all really that dumb.
No jury member with basic level of critical thinking, will be fooled by hes defence that he was "lucky" and at same time had access to comp that ran the whole thing, and he was not to ever play, but on this date, HE PLAYED & WON.
And did hes best to cover up who he was and wanted others to claim it on hes behalf.
So lottery people just admit it, your game has flaws and a bad apple found the flaw, mistakes happen, it's a human thing, just admit to it. plz just don't play us for fools.
#Lotterygothacked
Actually, Indiana actually did that for their Daily 3 and Daily 4 games back in 2013. (Three cheers to Indiana!) They switched from computerized drawings back to real ball drawings, hired a television personality, etc. Very good move!
Computerized drawings is one area where advanced technology is NOT a good thing. This is being spoken by a technologist (me).
l wish California could bench their Fantasy 5 computerized drawings as well. Their spokesman loves to show their " integrity videos" on how " This unit needs certain keys or whatever"/ Surveillance cameras in all areas to ensure that No one messes with or looks inside the computerized machine " unsupervised". Right.
I am surprised it took this long for one to finally surface. How many have went undetected? The laughable third party watching over things. How many of the computer glitches were overseen by 3rd parties that went on for months and only discovered by the players, and still denied after players complained. The Tennessee fiasco comes to mind right away quick.
I seriously hope they find hard evidence of tampering that way the dismissal of computers in the lottery games is truly considered. And kudos to IN, I had no idea they did a reversal. That is awesome! It would be interesting to see if there sales went back up after that decision. I know that would influence my buying of tickets if that happened here in MO. As I have said before, the only place for a computer in the lottery is in the printing of your ticket, other than that, NOWHERE!
Computerized drawing have been a major source of debate on lottery post for years.
Phew!
Relief...both Lucky for Life and Cash 4 Life are drawn with mechanical ball machine...so glad to have seen this on your website. No to RNG!!
The challenges of maintaining integrity and auditing computerize randomizers brings to mind similar issues with computerized voting machines.
Lottery randomizer computer code is often closed-sourced, procedures not fully documented, lack of testing (there have been numerous documented problems with lottery computer randomizers in the past favoring some numbers over others; search forums here for details), and the fundamental problem, due to the complexity of randomizer programs, there's often no way to verify all possible operations such a program may perform...
That is to say, a computer program may do operation "X" 100,000 times perfectly, but then encounter some edge condition and do something totally unexpected. The glitch may never be noticed, or is after the fact (that's how some past rnd problems have been found), and/or some may quietly take advantage of the flaw to beat the game... That may not affect other players at all / maybe even help them, but other times, such as in this news story, hurt other players seeking to win the jackpot, who had near zero chance unless they too happen to choose the same numbers; splitting a jackpot with a cheat.
Powerball and Mega Millions use computer randomizers for the Powerplay and Megaplier numbers. I realize there's history behind why they do it that way, but still seems sketchy.
There's another issue to consider when it comes to the discussion of computerized randomizer verses balls - many lottery drawings themselves, even when actual balls are used, are often not televised / streamed in real-time. So how does one really know the drawing was the drawing?
It's something I always wonder with Pennsylvania Lottery day drawings. What's to say there weren't others / was fixed ... it's a mystery. I've talked with some players who refuse to play PA Lottery day drawings for that reason - they don't trust it; drawings seems sketchy.
Also, many lotteries don't make televised drawings available on-line ... so if the tv drawing isn't shown due to due a sporting event or special (frequent problem in PA), one will never see the drawing unless they search youtube, etc and hope someone else recorded it.
All in all, there's a lack of controls and auditing of lottery drawings in many lottery jurisdictions. Computer randomizers and lack of transparancy, including the actual drawings themselves. Sure balls are better, but are of little consequence if the drawing itself is questionable - was it performed live, delayed, altered? Often it's difficult to know for sure.
Rambling on, but hoping, as many others here are, that lotteries dial-back their usage of computer randomizers, plus make more of an effort to make live video of drawings widely available, including both television and streaming over the net.
I know I'm done with hot lotto....thanks for helping me save money
I think I'm gonna stop everything and just deal with the casino. I do have one last dream number which is 0404. I'll keep that in and pray they let it come out one day.
Personally I think that's a bit extreme, but I don't blame you. As long as the states keep using computers for their drawings, they are playing with fire. Thank goodness there are still many games out there using real lottery drawings. I hope events like this will keep them aware that switching to computers is too big of a risk. The more events happen like this, the lower consumer confidence will be, and they will absolutely bleed revenue as a result. It's not worth the risk.
You've made all good points,I would add that here in AZ, you can not even be a witness for the drawing is not even held here in the state. The company running the Powerball does it. Machines stop allowing you to play at 7pm then you wait till after 9pm to see the results. Hell they have taken a hole day to show results. I do believe this is why here in AZ you have more second place prize winners than other states. 666 has yet to come out here in AZ since the lottery became legal here.
Sounds like a big mess. Bottom line: Some people lack integrity!
I always said that rng hackers can do anything today, drawings can be rigged and by some of the day results in PA it can be a reality I hope they ban them all and go to live drawings like most other states
I didn't know Indiana actually went back to balls. That's great. I wish Idaho would do ball drawings but I don't see that ever happening.
Not only are computerized random number drawings a bad idea because of this intentional rigging, there are also the unintentional problems that have been reported before with defective software not being truly random or not allowing certain number combinations to be picked (example - Tennessee's Cash3 and Cash4 problems reported here).
Although it is possible ping pong ball drawings can be rigged or skewed toward certain numbers, it is more difficult to do than rigging, or hacking, computerized drawings.
Computers are great tools, but they are not the answer to everything...
This article needs to be sent to every state lottery that's using computerized draws...
i think more than one game is rigged.
I always preferred Hot Lotto over Powerball, because of the better odds of winning. Nevermind that the top prize is small. It would still be life changing money to me and it costs half as much to play now.
However, I will likely never buy Hot Lotto tickets again, until they switch to balls for number selection. Only proble is, how will I ever know that they have switched?
I'm sure it would get mentioned in the media and other news sources and Todd would post an article about it. It would be a pretty big deal for them to go from computers to ball drawings
Iowa is a crooked state when it comes to the lottery a week or so ago they showed the number as 600 and 2 hours later they changed it to 900.............
pretty sad when they steal from the public. They are making plenty of money it is just GREED !!!!
They need to look into TN computerised lottery games as well. From what I have heard, many of their games have veered from the straight and narrow road.
I just hope Indiana brings back ball drawings for Hoosier Lotto.
Ha...you are correct. Even though I have heard of "shaved" or weighted balls and yes I mean that seriously... Gotta keep your eye on everyone and everything when that much money is at stake.
Tennessee would shut down before they would let that happen,you could win some money if it was balls,,,no wait they would rig that too.
well he could not pull this off without a helper.......camera guy.....was in on it too! he was just a dumb dumb......
his plan was not well thought of....and he is busted......i hope all states get this story, and try to at least keep some
security measures in place......i do wish all states would go back to ball drawings.......and give us at least a sense of
random.......tennessee which is the worst lottery can not afford ball drawings......people there just don't play and if
they pay out more then they take in.......so computer gives them the advantage to know their payouts......isn't that a
form of being rigged!