MUSL employee arrested in Hot Lotto jackpot mystery

Jan 15, 2015, 10:44 pm (44 comments)

Hot Lotto

DES MOINES, Iowa — The Iowa Division of Criminal Investigation has made an arrest in the four-year-old case involving a winning Hot Lotto ticket worth more than $16 million which the winner mysteriously decided not to claim.

Eddie Raymond Tipton, 51, of Norwalk, was arrested on Thursday. He has been charged with two counts of fraud, which are class D felonies.

Tipton is Director of Information Security for the Multi-State Lottery Association (MUSL), which is a vendor of the Iowa Lottery. His job prohibits him from playing the lottery. Assistant Director of the DCI Dave Jobes says Tipton attempted to claim the prize with the assistance of others.

"The allegations for these charges stem from his statutory prohibition on playing or winning the lottery. That prohibition was due to the nature of his employment with the Multi-State Lottery Association where he currently works as the Director of Information Securities," says Jobes.

The complaint against Tipton says he lied to investigators about buying the ticket and told them he was in Texas at the time. Cell phone records proved that was a false statement. The complaint also details the complicated maneuvering Tipton did in an attempt to claim the prize. He allegedly used friends in Texas, one of which was a lawyer, to contact a Canadian man about claiming the prize because the winner wanted to remain anonymous. The Canadian man, Philip Johnston, contacted the lottery about claiming the prize but the lottery says his account of how the ticket was bought was not consistent with the facts of the case.

Another attorney, Crawford Shaw, contacted the Iowa Lottery the day the ticket was to expire and said he represented Hexam Investments Ltd., the holder of the ticket. Johnston was listed as the Trustor/President of the company.

The lottery continued to question the validity of the claim because it could not determine who purchased the ticket and refused to pay the jackpot.

"We have strong security procedures in place to protect and ensure the integrity of our games and we absolutely believe this case indicates those processes worked to protect lottery players , lottery games and lottery prizes," says Iowa Lottery CEO Terry Rich.

The Hot Lotto ticket was bought at a Des Moines Quick Trip in 2010.  It went unclaimed until just hours before the ticket expired. An attorney who claimed to represent the winner came forward with the ticket. He refused to identify the winner or answer questions about the transaction then withdrew the claim.

"We all know there will always be people who will try and beat the system.  We have and will continue to update our security procedures to identify vulnerabilities to protect against them," says Rich.

The DCI has been investigating ever since, trying to determine what happened. They say despite Tipton's arrest, they are continuing to investigate the case.

Read the complaint in the Related Links section below.

News story photo(Click to display full-size in gallery)

Lottery Post Staff

Comments

s5thomps's avatars5thomps

The Irony of it all. Should of just gave the ticket to a friend and split the profit!

ThatScaryChick's avatarThatScaryChick

Not very smart of Mr. Tipton. He knew he wasn't legally allowed to play in the first place and he still bought tickets anyways and then tried to claim the prize. Roll Eyes

Igamble's avatarIgamble

Quote: Originally posted by s5thomps on Jan 15, 2015

The Irony of it all. Should of just gave the ticket to a friend and split the profit!

 He did just that,but you are as they say retarded and need to re read article !

The ticket was INVALID since it was bought by person WORKING FOR THE LOTTERY and that is ILLEGAL.

The security guy  for 16million bucks took a chance to try and outsmart the syztem.I may have done the same.

At least he got lucky with the winning  ticket but could not cash it...that's so crazy

Igamble's avatarIgamble

I bet it was not a quick pick and maybe somehow since was security  chef knew the combos /algorithm at play for that game  ??That raises a lot of questions !!

what are the chances a person in that position hits that kind of jackpot ?? Very small....

music*'s avatarmusic*

 Eddie Tipton threw his career away.  "Stupid is as stupid does" Forrest Gump

p4wanbi's avatarp4wanbi

Yep. No cant split with the friend because IRS would know where the windfall come from and etc. there are a lot of "he should" and "shouldnt". The multi-state lottery gets to keep the money that went unclaimed. He actually created bad karma for himself. Had he not  play...someone who can legally play could have won that jackpot. 16mil can change many lives for the better. If you were going to play the game, quit the job to be removed from restrictions and then play.!i believe he regretted not getting the 16mil more than orrying about the charges. Greed can do lots of unimaginable damages...on a large scale!!!

Nikkicute's avatarNikkicute

So the dude in Iowa called the guy in Texas who got in contact with the man in CanadaCrazy

What the heck!?!

Seattlejohn

This one always stunk to high heaven; who gives up $16 million?  And that screwball attorney with his idiotic claims & refusal to follow lottery procedure was a huge red flag.  Now it all makes sense.  Too bad @ Mr. Tipton; he not only didn't collect on a millions to one lottery win, but will be fired (if he hasn't been already) from his place of employment.  Sad, sad, sad...

mypiemaster's avatarmypiemaster

The really sad thing is that he denied the next legitimate winner the opportunity to collect that extra $16M. You think the greedy boneheads at the lottery will seek out the next legitimate winner and hand them the $16M they lost because of Tipton's illegal participation?  Yep, dream on. Greed and the lure of easy money has been the downfall of many.

Stack47

Quote: Originally posted by Nikkicute on Jan 15, 2015

So the dude in Iowa called the guy in Texas who got in contact with the man in CanadaCrazy

What the heck!?!

Don't forget the NY lawyer that tried to validate the ticket hours before the deadline for Hexam Investments Ltd. Nobody could make up story like this no matter how hard they tried.

FlamingoGirl's avatarFlamingoGirl

Oh wow I remember this! I always wanted to know what happened!

WWWBUKTN

There has to be so much more to this story.   There's a much bigger reason than him working for the Lottery that he didn't have a friend or relative claim this prize and go through all this nonsense.

KY Floyd's avatarKY Floyd

Quote: Originally posted by Igamble on Jan 15, 2015

 He did just that,but you are as they say retarded and need to re read article !

The ticket was INVALID since it was bought by person WORKING FOR THE LOTTERY and that is ILLEGAL.

The security guy  for 16million bucks took a chance to try and outsmart the syztem.I may have done the same.

At least he got lucky with the winning  ticket but could not cash it...that's so crazy

Maybe you should reread the article, too. It took most of 4 years for the lottery to determine that the ticket was invalid because the purchaser worked for the lottery. The correct approach is for the lottery to assume there's a problem and use security procedures to establish the ticket's validity, but as far as they actually knew when the Canadian guy contacted them it was valid. If the Canadian guy had been able to give them the right answers it's entirely possible that they would have made the payment, making the real buyers plan to give it to somebody else to make the claim successful. It might have been as simple as accurately describing how the buyer was dressed, assuming he had a similar appearance to the real buyer.

I'd guess that the real buyer figured any prize he won would be modest and that he'd be able to just walk into a retailer and claim the modest  cash. He may well have just walked away if it had been just a bit more than the amount that can be claimed from a retailer. OTOH, I expect everybody can understand why he found it too hard to walk away when he had a ticket that would potentially put several million bucks in his pocket.

The complaint is interesting (and brief) reading. It's different than typical criminal work, but I'm a bit surprised that a guy who was Director of Information Security  made the same stupid mistakes that so many other criminals do. He had easily established connections with the Texas lawyer, used his own cell phone to call him, and then claimed he was in Texas at the time of purchase despite using that phone in the general vicinity of the store.

dr65's avatardr65

Ok states do something more. Director of Information Security, sounds like a big position or is it? He played the lottery

and wasn't supposed to play, he must've known taking the job that was one of the no-no's. Anyway the things he did

to hide the identity of who actually won and to collect the winnings are worse than playing. Someone said 'insider info'

....quite possible and yes, it does raise flags, doesn't it? What actually do the inside people know? I'd like to know how

long he was employed there.

Soooo, why not crack down on the little scum? The retailers and clerks who can't wait to watch players playing and swoop

in with their own 'insider info' and take the next ticket in a string of 10 losers? I've seen references on the instants forum

about many people witnessing clerks/owners playing themselves...read complaints about the clerk/owner buying up the

next ticket after a player has played quite a few and lost. I've seen clerks awfully interested in whether you 'won

anything or not'. Their insider info is knowing who is playing what, what they cashed, what the person won or lost and

which ticket to stay away from...I've seen employees on shift visit the IVM and play during working hours...they also

run the terminal and payout the winners AND in some cases, stock the machine.

MAKE THIS PRACTICE ILLEGAL WHILE ON SHIFT. IF ANYONE HAS ANYTHING TO DO WITH PAYING, RESTOCKING,

CHECKING OR IS IN A POSITION TO KEEP TRACK OF WHAT PEOPLE ARE BUYING DO NOT ALLOW THEM TO PLAY

WHILE ON SHIFT.

Their job might be counter clerk or cashier or office person BUT IF THEY TOUCH THE TICKETS THEY SHOULD NOT

BE ALLOWED TO PLAY THE TICKETS WHILE ON SHIFT. The tickets are there for the uninformed general public who

do not have a job in the store where they are purchasing lottery. I've been told by the lottery commission that an

employee playing during shift, handling winners and losers and stocking the machine has a right to play too.

Where is the justice in that train of thought? When you fill in a claim form there is a box - a couple of them - that

specifically ask: ARE YOU A RETAILER OR IS A FAMILY MEMBER A RETAILER?? Or DO YOU OR A FAMILY MEMBER WORK

FOR A LOTTERY RETAILER??

The answer for anyone behind the counter is YES. So as far as claims go, they shouldn't be allowed to be made by

employees and as far as I'm concerned, they shouldn't even be allowed to play or collect while on shift..whether it's

$50 or $50k.

Let's go states....keep the laws applicable to everyone, not just the bigger claims.

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