By Jason Clayworth
A judge has granted class-action status in a lawsuit that claims people who purchased at least 7.2 million lottery tickets in 19 states were scammed by a former national lottery IT director who worked in Iowa.
Eddie Tipton, the former IT director for the Multi-State Lottery Association in Urbandale, added a secret code to "random" number-generating computer software in 2005 that allowed him to narrow the drawing's winning odds from as great as 5 million to 1 down to 200 to 1.
Tipton's scam — the largest in U.S. history — went undetected for years, and the code was replicated in lottery computer software across the nation. He hijacked at least five winning drawings totaling more than $24 million in prizes in Colorado, Wisconsin, Iowa, Kansas and Oklahoma, court records show.
The scheme began to unravel following multiple failed attempts in 2011 to collect a $16.5 million ticket Tipton had purchased at a Des Moines convenience store. He was sentenced in 2017 to up to 25 years in prison in connection with the lottery scams.
Burlington resident Dale Culler is among at least three people who have filed lawsuits naming the Multi-State Lottery Association in connection with the rigged games.
This month, Polk County District Court Judge Michael Huppert granted Culler's effort to seek damages on behalf of potentially hundreds of thousands of players.
Court documents show Culler spent $63 to purchase tickets in two games he believes were affected by Tipton's scam. He has alleged that at least 20 drawings between 2005 and 2013 were affected.
The lottery association — commonly referenced as MUSL — argued that a class-action lawsuit is not manageable because its members cannot be sufficiently ascertained due to the lack of records of people who purchased losing tickets.
Culler argued that people who believed they've been cheated could use affidavits to identify themselves as members of the class-action lawsuit, which Huppert ruled as acceptable.
"The court finds that potential problems of manageability do not outweigh the fact that a class-action suit is the best, and perhaps the only, method of resolving this dispute," Huppert wrote in his opinion.
MUSL is an umbrella organization that is owned and operated by 36 member lotteries including the Iowa Lottery. Its executives previously have said they no longer use computer programs that Tipton designed.
Bret Toyne, the association's director; and Jerry Crawford, a Des Moines attorney who is representing Culler; declined to comment, citing ongoing litigation.
Details showing how players may join Culler's lawsuit have not been filed with the court. A trial is set for March 11.
Culler says games in the following states are affected: Iowa, Colorado, Wisconsin, Kansas, Nebraska, Idaho, Kansas, Minnesota, Montana, North Dakota, New Hampshire, New Mexico, South Dakota, West Virginia, Oklahoma, Delaware, Maine, Vermont, Tennessee and Washington, D.C.
Timeline of the biggest crime in US lottery history
The following is a compilation of Lottery Post news coverage chronicling the Hot Lotto mystery and subsequently discovered crime.
We start the timeline with a news story indicating that only 3 months remained for the $16 million Hot Lotto jackpot to be claimed.
2011
- Deadline for claiming $16.5M Hot Lotto jackpot nears, Sep. 21, 2011
- Unclaimed Iowa lottery jackpot to expire Dec. 29, Dec. 1, 2011
- Iowa $16.5M Hot Lotto winner claims prize with two hours to spare, Dec. 29, 2011
2012
- Iowa Lottery security chief bent on determining identity of jackpot winner, Jan. 10, 2012
- NY lawyer in lottery mystery travels to Iowa this week, Jan. 17, 2012
- Iowa Lottery security chief to grill NY lawyer over Hot Lotto ticket, Jan. 17, 2012
- Representative of Hot Lotto winner named in lawsuit, Jan. 20, 2012
- Hot Lotto trust representative won't name winner, Jan. 20, 2012
- Iowa Lottery threatens to deny jackpot payout if winner stays anonymous, Jan. 23, 2012
- Lawyer gives up $14 million Iowa lottery ticket claim, Jan. 26, 2012
- $14.3 million Hot Lotto prize claim withdrawn, Jan. 27, 2012
- Iowa Legislators satisfied with Lottery's handling of mystery jackpot winner, Feb. 1, 2012
- Iowa Lottery to give away millions from jackpot mystery, Feb. 26, 2012
- Iowa Lottery director: 50-50 that Hot Lotto mystery will be solved, Aug. 9, 2012
- Iowa officials trying to solve lotto mystery, may release surveillance video, Aug. 19, 2012
2013
- 1 year later, Iowa Lottery still hunting for suspicious no-show winner, Jan. 30, 2013
- Inquiry in Iowa Lottery mystery touches Canada, Jul. 26, 2013
- Lottery jackpot probe heats up after immunity deal, Oct. 8, 2013
2014
- Iowa Lottery still hunting mystery Hot Lotto winner [video], Oct. 10, 2014
2015
- MUSL employee arrested in Hot Lotto jackpot mystery, Jan. 15, 2015
- BOMBSHELL: MUSL employee might have rigged Hot Lotto computerized drawing, Apr. 13, 2015
- Texas man charged in Iowa lottery case contests extradition, Apr. 20, 2015
- Extradition trial begins this week in $16.5M Hot Lotto fraud case, Jun. 7, 2015
- Inside the biggest lottery scam ever, Jul. 7, 2015
- Trial underway in world's biggest lottery fraud case, Jul. 14, 2015
- Lottery security chief: Rigging computerized game "sadly" possible, Jul. 15, 2015
- Prosecution rests in Hot Lotto trial, Jul. 16, 2015
- Defense quickly wraps up in Hot Lotto trial, Jul. 16, 2015
- Hot Lotto case moves to jury for deliberations, Jul. 17, 2015
- Former lottery security employee guilty of rigging $14.3M drawing, Jul. 20, 2015
- MUSL security worker who rigged drawing gets 10 years, Sep. 9, 2015
- HOT LOTTO DRAWING CHEAT CHARGED WITH RIGGING MORE JACKPOTS, Oct. 9, 2015
- Texas authorities had previously investigated brother of lottery cheat, Oct. 14, 2015
- Another $1.2M Hot Lotto jackpot rigged by Tipton, officials say, Nov. 21, 2015
- Jackpot-fixing investigation expands to more state lotteries, Dec. 18, 2015
- Prosecutors say Tipton rigged two jackpots he purchased tickets for in Kansas, Dec. 21, 2015
- Maine gives names of Hot Lotto winners to Iowa team looking into rigging scheme, Dec. 23, 2015
- S.C. Lottery assures public no computerized drawings used in state, Dec. 23, 2015
- Kansas lottery players questioning game's integrity, Dec. 23, 2015
- MUSL CHIEF OUSTED OVER JACKPOT-RIGGING SCANDAL, Dec. 23, 2015
- Lottery scandal unlikely to affect New Mexico, official says, Dec. 26, 2015
- Tipton granted delay in next trial until July, Dec. 29, 2015
2016
- Iowa Lottery CEO Terry Rich to answer lottery player questions live Monday evening, Jan. 11, 2016
- First lawsuit in state lottery-fixing scandal seeks millions, Feb. 4, 2016
- MUSL seeks to dismiss lawsuit over rigged jackpot, Apr. 1, 2016
- Lottery scammer's brother facing criminal charges, Apr. 6, 2016
- Investigators find Tipton's software code to rig computerized lottery drawings, Apr. 7, 2016
- Lottery rigging scandal prompts security audit in South Dakota, Apr. 13, 2016
- Preliminary hearing rescheduled for Tommy Tipton in lottery rigging case, Apr. 22, 2016
- Third suspect surrenders in national lottery rigging scandal, Apr. 28, 2016
- Lottery scam investigation comes to Tennessee, May 11, 2016
- Investigators find another friend of Tipton who cashed rigged lottery prize, May 11, 2016
- Convicted computerized drawing fraudster argues Iowa court appeal, Jun. 16, 2016
- US Senate panel demands info in lottery scandal, Jun. 22, 2016
- Lottery rigging trial to be moved out of Des Moines, Jun. 27, 2016
- Eddie Tipton's new trial delayed until 2017, Jul. 1, 2016
- Iowa court reverses part of Tipton's lottery fraud conviction, Jul. 28, 2016
- Internal investigation concludes Tipton acted alone to rig lottery drawings, Aug. 10, 2016
- Prosecutors say 2 more men may be linked to lottery riggings, Aug. 24, 2016
- Judge: winner's lawsuit in lottery-fixing case can continue, Oct. 13, 2016
- Alleged lottery scandal conspirator to enter new plea, Nov. 14, 2016
- Accused lottery rigger Eddie Tipton facing new Wisconsin charges, Dec. 22, 2016
2017
- Man files lawsuit over rigged lottery jackpots, Jan. 4, 2017
- Trials for Tipton brothers charged in lottery scandal delayed, Jan. 8, 2017
- Former MUSL official received severance amid lottery jackpot scandal, Jan. 10, 2017
- Texas man pleads guilty to fraud in lottery scandal case, Jan. 11, 2017
- Iowa Supreme Court hears lottery rigging case, Feb. 14, 2017
- Kansas files lawsuit against accused lottery rigger, Mar. 16, 2017
- Best friend to testify against Tipton at July lottery rigging trial, Mar. 31, 2017
- Mastermind of lottery fraud will explain how he rigged jackpots, Jun. 12, 2017
- FBI missed rigged jackpot in 2006 before lottery scheme grew, Jun. 19, 2017
- The 5 lottery jackpots Tipton and his friends stole, Jun. 20, 2017
- Lottery jackpot rigger's Iowa convictions dismissed, Jun. 23, 2017
- IT'S OFFICIAL: Tipton pleads guilty to rigging computerized lottery drawings, Jun. 29, 2017
- Lottery rigging accomplice used Wisconsin payout for offshore tax scam, Jul. 6, 2017
- Hot Lotto multi-state lottery game to end in October, Aug. 9, 2017
- Lottery rigging mastermind sentenced to 25 years in prison, Aug. 22, 2017
- Winner sues Colorado Lottery 12 years after rigged drawing, Oct. 5, 2017
2018
- Lottery scammer rigged more drawings than first thought, records show, Feb. 19, 2018
- How a gaming geek with a checkered past pulled off the biggest lottery scam in U.S. history, Mar. 16, 2018
- Infamous lottery scammer says US computerized lottery drawings remain fatally flawed, Mar. 19, 2018
- Iowa Lottery wins International Gaming-Compliance award for work in lottery rigging investigation, Apr. 19, 2018
- The man who cracked the lottery, May 3, 2018
- Memo: Iowa Lottery kept selling games after security warning, Aug. 1, 2018
- Investigation finds lottery scamming Tipton brothers have repaid virtually nothing, Dec. 27, 2018
2019
- Lawyers seek to depose lottery fraud mastermind in prison, Jan. 21, 2019
"Culler says games in the following states are affected: Iowa, Colorado, Wisconsin, Kansas, Nebraska, Idaho, Kansas, Minnesota, Montana, North Dakota, New Hampshire, New Mexico, South Dakota, West Virginia, Oklahoma, Delaware, Maine, Vermont, Tennessee and Washington, D.C."
My state isn't listed
Eddie Tipton affected so many lives. He was a person in authority and abused that position.
It will be interesting to watch this class action lawsuit. No one knows where it will end.
There are so many ways to join a class action suit. All they have to do is say they were affected and they'll get a piece of the settlement.
The only persons who's going to benefit from Class Act Suits , will be the Attorney(s) !!!
NOT the people who bought the Tickets !!!
l doubt it’s that simple TMM. These folks joining this class action lawsuit better have containers of losing stashed away. Simply saying “l played and lost” while Eddie was up to no good, won’t cut it.lf it was that easy, panhandlers could come forward saying they played the lottery as well, but threw away their tickets when they read “ Sorry, not a winner.”
LP will probably get at least one new member asking for losing tickets from the states and time framed mentioned.
I just want to see restitution from those two Brothers. They seem intent and not paying back the judgment against them.
” Eddie affected so many lives.” He probably thinks, not according to him, given that it’s a game of chance.I also wonder how much Culler thinks HE should be getting in this settlement, a million dollars or more?
l am surprised the courts haven’t attacked his bank accounts. What are they waiting for?
Good point. Doesn't the government seize money launderers and drug king pins monies as well as their assets such as houses, boats, airplanes etc.? Seize and sell!!
I can't recall if it was Culler or not, but wasn't there a Hot Lotto winner right after Tipton "winning" his jackpot? That person would have won the won the money that Tipton tried to get.
You thinking of Larry Dawson rcb- that guy won “ $9 Mil” but said that it “ should have been $ 26 mil” had not Eddie screwed around with a prior drawing. I guess $9 mil is not good enough for Ol Lucky Larry.
l guess the government does not feel that they were personally gipped by Eddie. They seem to have washed their hands, given that it’s been reported that Eddie has paid hardly anything back thus far.Probably hoping to dig up his stash when he gets released.
Don't be surprised if once the case is settled, the law firm handling the class action suit gets something like $10 Million and each class participant gets $1.05 each.
"Eddie affected so many lives."
Just like when MM and PB draw numbers 94% don't have. Maybe we should all non jackpot winners should sue. Without the melodrama, if any lives were actually affected, the blame should be on the people who hired Eddie and the lottery he worked for. Is the Multi-State Lottery Association responsible for paying all the "affected lives" if the Hexham Investments Trust can't?
Even though the numbers Tipton picked were the only numbers that could win the jackpot, players still can't prove their numbers would win the jackpot had he not rigged the drawings. "Lucky Larry" Dawson won the next jackpot after the fix; wonder if fix affected his live too or how if he wins his suit will affect the class action suit?
*And I understand "affected so many lives" isn't yours. Just thought replying to you post was more fun.
Hilarious Stack. I did a search on this guy Dawson, and it turns out he took the bulk of his $9 mil & expanded his business. I guess when word got out that fast Eddie was doing a " fast one" he figured that he could get a 2nd bite at the lottery apple. Culler on the otherhand spent $63.00 on two games, but somehow interprets his investment covers him for 9 years. You couldnt make this stuff up, even if you tried. You remember that episode where a woman played the penny slot machine & it rang her up that she had won " millions of dollars"- the casino offered her a steak, but she pushed back..
Costco had a class action lawsuit against one of their vendors for LED bulbs. Had no idea until a check came, it was either for $24 or $48 can't remember, they went by how many you bought. Now these guys like you said duckman will get $1.05 each if they even win that is.
"I guess $9 mil is not good enough for Ol Lucky Larry."
I'm pretty sure that everybody who doesn't work for the lottery thinks the $16 million that Tipton tried to claim is prize money that the lottery shouldn't be keeping. There's absolutely no doubt that if Tipton didn't have a fraudulent ticket with numbers that wouldn't have come up if he hadn't rigged the game that money would have gone to a different player (or players) in that or a future drawing.
That means there's also absolutely no doubt that Dawson's prize was affected by Tipton. Of course the higher advertised jackpot in subsequent drawings means more tickets would have been sold before Dawson won, so there's a chance that somebody would have won the jackpot before Dawson did. That means that there's a very good chance that he actually benefited from Tipton's scheme by winning a bigger jackpot. OTOH, there's also no disputing that he was the first legitimate jackpot winner after the previous legitimate winner.
So how do you decide what's fair when you know for a fact that Dawson's prize almost certainly wasn't what it should have been, but you've got no way of knowing how much it would have been without Tipton? Maybe the best solution is to multiply that $16 million by the probability that nobody would have won before Dawson if sales had been as high as they would have been. The exact sales volume isn't certain, but they can make a fairly accurate estimate, and for that estimate they'll know almost exactly what the chances of a winner would have been. That might mean Dawson should get almost nothing, or it might be several million. The rest should go to players one way or another.
Good read Floyd. I for one, seriously doubt Larry will get millions more. He can try, but ultimately the powers that be could turn around & tell Dawson that because of Eddie's machinations, he, larry benefited from that draw.Kinda like those folks who can't hold their liquor, leave the bar, get into an accident & then turn around and blame the bartender, who was only doing his job, by not doing it, for overserving him or her drinks.
* In other words: Everything was great, until it was not so great.
One of the required elements in a lawsuit asking for damages is being able to prove the damages. Dawson's problem is that he can't prove that he would have gotten all the money if it weren't for Tipton. It might be unfair not to give him something, but the law doesn't always do what's fair.
OTOH, all the people who lost in the rigged drawings can prove that their chance of winning was probably reduced to zero (Tipton's scheme allowed a couple of hundred possible combinations, so a few players had a pretty good chance). If they can also prove how much they spent on those drawings then they're able to prove their damages.