Last remaining defense shattered as investigators find and decipher jackpot rigging code
A lottery vendor for years manipulated drawings to enrich himself and associates by installing software code that allowed him to predict winning numbers on specific days of the year, Iowa investigators alleged Wednesday.
Authorities called the newly obtained forensic evidence a breakthrough in the investigation of alleged jackpot-fixing scheme by Eddie Tipton, former security director of the Multi-State Lottery Association. A jury convicted him last year of rigging a $16.5 million jackpot, and he's awaiting trial on charges linking him to prizes in Colorado, Wisconsin, Oklahoma and Kansas.
Prosecutors filed charges Wednesday against his younger brother, Tommy Tipton, a former justice of the peace and reserve police officer in Texas. He surrendered to authorities and was released on bond. He's charged with ongoing criminal conduct related to his role in securing the Colorado and Oklahoma jackpots, which allegedly netted him $1.2 million in cash.
The case has rocked the Multi-State Lottery Association, an Iowa-based nonprofit that administers Powerball and other games for states.
Prosecutors had alleged Eddie Tipton tampered with random number generators that were used by the association and state lotteries to pick jackpot winners. But their case had been based on circumstantial evidence because the generators had been erased or destroyed. Tipton's defense has cited the lack of evidence as a reason charges should be dismissed.
Documents filed Wednesday show Wisconsin authorities recovered the random number generator used for a $2 million Megabucks jackpot claimed in 2008 by Tipton's friend, Robert Rhodes. He is fighting extradition from Texas to Iowa, where he faces charges.
A forensic examination found that the generator had code that was installed after the machine had been audited by a security firm that directed the generator not to produce random numbers on three particular days of the year if two other conditions were met. Numbers on those days would be drawn by an algorithm that Tipton could predict, Iowa Division of Criminal Investigation agent Don Smith wrote in an affidavit.
All six prizes linked to Tipton were drawn on either Nov. 23 or Dec. 29 between 2005 and 2011.
Investigators were able to recreate the draws and produce "the very same 'winning numbers' from the program that was supposed to produce random numbers," Smith wrote
Eddie Tipton was charged last year after authorities released surveillance footage of a person buying the winning ticket for a $16.5 million Hot Lotto jackpot and hot dogs at a Des Moines gas station in 2010. Colleagues identified the buyer as Tipton, a computer whiz who had unparalleled access to lottery software.
Tommy Tipton, 51, testified at his brother's trial, saying the buyer looked nothing like his sibling. Besides, he said, Eddie doesn't like hot dogs.
But months later, Tommy Tipton resigned his elected judicial position in Flatonia, Texas, after his brother was convicted and his name surfaced in the case.
The complaint filed Wednesday says that Tommy Tipton came under scrutiny in 2006, when Texas investigators received a tip that the judge had $500,000 in cash in consecutively marked bills.
He told them he got the money after winning a share of a $4.5 million Colorado Lotto jackpot, saying he recruited a friend to claim the $569,000 cash payout because he didn't want his wife to know about it while they were considering divorce.
Investigators didn't know then that Tipton's brother wrote and installed the program that Colorado Lottery officials used to draw the numbers.
In 2011, Tommy Tipton purchased numbers that would win a $1.2 million Hot Lotto jackpot while traveling in Oklahoma, the complaint said. A relative of one of Tipton's friends claimed the $644,000 prize, which was returned to him.
Tipton's attorney, Randy Schaffer, said he was reviewing the allegations and didn't want to address their merits. But he said he "took the high road" by surrendering rather than fighting extradition.
"This is a guy who, until a few months ago, was a judge," he said. "He's going to hopefully... be professional and responsible in his dealings."
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.
- 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
- 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
- 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
- Iowa Lottery still hunting mystery Hot Lotto winner [video], Oct. 10, 2014
- 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
- 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
Another nail in the coffin.
Now, if they would just start using balls, instead of the rng, I might start buying Hot lotto Tix again.
I'll play MM and PB because they are ball drawn, but the minute they go to RNG and I'm done.
I actually never could figure out why Hot Lotto is RNG, and PB and MM are ball drawn.
I doubt if MM and PB had used a RNG either of them would have been added by as many states as they have.
Just as in any other crime, for every criminal they catch many more get away with it.
He's not the only one doing it,he just got caught...Check the rest of the states...I bet 3/4 of the ones is scammers with him.If people would stop playing the lottery,there might be a change.I did in Tennessee,it's hard yes it is but worth it when you can say to yourself,thats one more dollar she's not getting and laugh out loud.lol
This story has finally hit the national news, was on CBS morning show.
Greed seemed to have overtaken Tipton, couldnt just leave it alone for a one time win. Now its widespread and involved many more people. How many of these scenes are being played right now we dont even know about? Yet?
The brother, a Judge, another crook, yikes.
"All six prizes linked to Tipton were drawn on either Nov. 23 or Dec. 29 between 2005 and 2011.
Investigators were able to recreate the draws and produce "the very same 'winning numbers' from the program that was supposed to produce random numbers," Smith wrote"
Sounds like he never removed the subroutine that allowed him to win if the drawings results could be predicted on those two dates for six years. I would have thought those extra lines of code would have showed up when outside sources did their security checks else the routine was part of the RNG. I remember when Tennessee first used its RNG for pick3/4 games it wouldn't pick doubles or triples because of a subroutines in the program.
Thanks LOTTERY POST Insider Buzz
The LOTTERY POST has always been "out front" reporting the disgrace RNG draws bring to the lottery and the excuses every state
uses for their "it will save us money" introductions, They should know by now that cheap don't git what all lottery players require,
"HONESTY" more "HONESTY" total "HONESTY" and "SECURITY" in each and every lottery game. NO MORE RNG drawings XXX XXXX
Ball Drawn Games can be Rigged Too!
"I would have thought those extra lines of code would have showed up when outside sources did their security checks"
Of course it would show up. That's what makes this so bizarre, and such an indictment of the security procedures that failed to discover the tampering.
"drawn on either Nov. 23 or Dec. 29 between 2005 and 2011."
That's 6 years and a month, as an absolute minimum. Does that mean it went undetected for 6 full years, or was he able to reinstall it over and over? Either way, it seems obvious that the software wasn't audited often enough.
I'd like to see more details on how the code was "recovered" by Wisconsin. Was a machine in Wisconsin altered as well as the one(s) in Iowa, or was an Iowa machine transferred to Wisconsin (and not audited before being placed in service)? Did Wisconsin have a copy of the software or a disk image from that time? The latter could be part of a good security policy, but not as useful as it could be when you only check it 7 years later. If they are saving disk images I'd think the investigators would have been looking for exactly this kind of evidence a long time ago, and should have had it in time for the trial.
"Sounds like he never removed the subroutine"
There could be a disk image that includes the code even if it was removed or deleted from the machine it was installed on. Removing it would require actively deleting it or having it deleted by other software on the machine. The other software could be a completely independent of the code that generated the predictable numbers, or it could be part of he same code. Either way it can't delete anything if the program doesn't run, and therefore execute the code. If the code executes when a drawing is conducted at 11:00PM on a Friday night copying the code or creating a disk image any time before 11 would give you a source that will retain the code unless the program is run. Since the entire purpose would be to document the exact code that existed at that time you'd never run the program.
He can't be tried again on the same charge, but he can be tried for anything he wasn't already tried for. Prosecutors frequently manage to try people again by coming up with a different set of charges for the same crime. In this case they may have a lot of new crimes to choose from.
This article said Tommy was Eddie's younger brother. Yesterday's article said Tommy was the older brother.
Wow, great eye! I have fixed yesterday's article. The ages were reversed.
The text in paragraph four of yesterday's article still needs updating if the ages were reversed. Younger should read older brother Eddie.
Someone can claim he wasn't the only one. Someone can even claim some of the evidence is circumstantial. No one should be still saying that there's reasonable doubt. Because there isn't. You can have doubts but that doesn't make them reasonable. If you look at the odds of winning any of these prizes, how many of his relatives and friends claimed those winnings, which were all won only on certain days, at some point logic has to kick in and say, okay, it is unreasonable to assume he's innocent.
You can make any assertion you want to, except that he's innocent, because he isn't.
I have no idea if he created the program. I have no idea if he was the one who installed the program. He may not have. But it doesn't matter, because he was definitely, 100% involved with the scam. That's what puts him behind bars.
If he didn't create or install the program then he gets brownie points for not being a snitch. But that's all he gets because he was in on it and that makes him a thief and a crook. That's not my opinion, that's fact.
Tipton knew that it was game over when he read " Investigators were able to re create the draws and produce the very same numbers from the program "
...The Smoking gun moment.
This code was in play for 6 years, 2005 to 2011!? And those supposedly auditing the system didn't catch it? Mindblowing incompetence!
So, are they going to destroy the code, or is someone else going to tweak it and make it better for their own gain?
On the other hand, if it could be used to to make sure certain numbers DO show up, why couldn't it be used to make sure certain numbers DO NOT show up?
RNG states are probably doing a happy dance right now.
As long as something is done by computer it can be hacked or manipulated and when it comes to money and large sums of it, it almost certainly will be.
It's a kick in the lottery balls for everyone who plays not only that lottery but any lotto on the planet. One has to wonder how many cover ups go on for the good of people in other lotto's?
So how do we know what games are using actual ball draws vs computer?
"All six prizes linked to Tipton were drawn on either Nov. 23 or Dec. 29 between 2005 and 2011.
Investigators were able to recreate the draws and produce "the very same 'winning numbers' from the program that was supposed to produce random numbers," Smith wrote"
Once in a while I've noticed some winning combinations have the dates included like "04 08 16" and wonder if some RNGs have code planted in them to do that. If they did and it only happened intentionally two or three times a year it might go on for years and never get noticed giving the players who know about it a big advantage.
You can watch the live drawings or check LP report card.
I have a feeling the RNG software was only thoroughly checked prior to installation or upon any updates. After that auditors would have relied on statistical reporting to check if the lottery results were random. It would not be difficult to mask 2 determinate combinations as "random" in the larger population of drawings, especially if he used an algorithm. The "conditions" would have probably included recently past drawn numbers, so as not to trigger significance tests.
So what happens to Larry Dawson's lawsuit?
If I was on a jury for this (which I am not sure it is a jury trial?) I would award him 1/2 of the amount as this is PROOF that it was rigged but again it is unknown if someone else would have hit.
Why should he get any more than he won? He played to win the estimated jackpot posted for the drawing he won. If he didn't like the jackpot amount he shouldn't had brought any tickets.
Now had he won less than the estimated jackpot because of Tipton's cheating,then he might have a case.
"He played to win the estimated jackpot posted for the drawing he won."
If he bought a ticket based on an incorrect lottery ad that listed the prize as $9 million when it was really $19 million would you think he's only entitled to $9 million because he was willing to buy the ticket, or do you think he'd be entitled to the correct prize amount? What happened here is no different. What Dawson deserves has nothing to do with the amount that was advertised. He deserves the correct prize amount.
"Now had he won less than the estimated jackpot because of Tipton's cheating,then he might have a case."
There's a pretty good chance that he did win less because of the cheating. Unfortunately for him, there's no way to prove that it should have been anything different than what it was advertised as. You can use probability to determine what the most likely results would have been, but the entire lottery business is based on very unlikely things happening.
You & I would have fun being on the same jury!
"If he bought a ticket based on an incorrect lottery ad that listed the prize as $9 million when it was really $19 million would you think he's only entitled to $9 million because he was willing to buy the ticket, or do you think he'd be entitled to the correct prize amount? What happened here is no different. What Dawson deserves has nothing to do with the amount that was advertised. He deserves the correct prize amount."
They didn't advertise the wrong amount. They only found out about the cheating a year later. If after a year a jackpot goes unclaimed, should the next jackpot won be adjusted accordingly? Is the next jackpot winner any more deserving of that prize than anyone who brought a ticket for that drawing?
I'm pretty sure you didn't understand what I wrote. Your post that I was responding to contains reasoning that makes no sense, and I offered an example that I thought might clue you in.
You also don't seem to understand what happened, because the jackpot didn't go unclaimed. That money is a prize that was never won. It doesn't matter whether it took them a week, a month or a decade to find out about the problem. The only thing that matters is that there was a problem. That doesn't guarantee that the jackpot Dawson won was advertised incorrectly, but there's absolutely no question that because of the error roughly $10 million that should have been paid out as a jackpot prize was kept by the states. Dawson doesn't deserve it because there's no way of knowing what would have happened if Tipton hadn't bought a ticket that appeared to be a winner, so there's no proof that the money would have been part of Dawson's jackpot. It should be even more clear that the states don't deserve the money.
Long before the Dawson suit, MUSL had rules for returning unclaimed funds to the states which any player could have read. Dawson is dreaming a jury will rewrite those rules rather than interpret them which means he doesn't have a case. I would be surprised if his suit ever go to trial.