BOMBSHELL: MUSL employee might have rigged Hot Lotto computerized drawing

Apr 13, 2015, 8:14 am (85 comments)

Hot Lotto

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.

Des Moines Register, Lottery Post Staff


maringoman's avatarmaringoman

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.

Todd's avatarTodd

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).

rcbbuckeye's avatarrcbbuckeye


I was actually considering driving to OK to buy Hot Lotto tics just for the heck of it.

Guess I'll just stay home.

mrbg's avatarmrbg

This is so ridiculous.

jarasan's avatarjarasan

Balls are the best way.


CTNY's avatarCTNY

Well lookie here!!

cbr$'s avatarcbr$

I have always been against, computerized drawings. This story is every players nightmare for any game of chance. 


Quote: Originally posted by cbr$ on Apr 13, 2015

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...

JAP69's avatarJAP69


NOOO, say it aint so.

haymaker's avatarhaymaker

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.

ThatScaryChick's avatarThatScaryChick

Ugh, after this mess they should go to ball drawings. Mad

MADDOG10's avatarMADDOG10

Never trusted a game that was produced by a computer..

pickone4me's avatarpickone4me

HA!  I knew it!  Bad day for my haters with this news!

pickone4me's avatarpickone4me

Quote: Originally posted by noise-gate on Apr 13, 2015

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...

Singing a different tune.....How unsurprising.

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