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Convicted computerized drawing fraudster argues Iowa court appeal

Insider BuzzInsider Buzz: Convicted computerized drawing fraudster argues Iowa court appeal
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The attorney for a former lottery official accused of fixing jackpots in several states argued Thursday that his client's conviction last year on fraud charges should be thrown out.

Eddie Tipton, the former Multi-State Lottery Association computer security director, appealed his July 2015 convictions related to fixing an Iowa Hot Lotto game in 2010, which resulted in a 10-year prison sentence. He is free on bond during the appeal.

Tipton's attorney, Dean Stowers, told a three-judge Iowa Court of Appeals panel that evidence at Tipton's trial was not sufficient to support the convictions.

Iowa prosecutors have said Tipton bought a Hot Lotto ticket in December 2010 with the same numbers that he had programmed into the lottery computer a month earlier. They said he then gave the ticket to a friend in Texas who prosecutors say reached out to attorneys in Canada and Texas to try and cash it in without divulging the name of the original ticket buyer.

Since Iowa law requires jackpot winners to be identified, the $16.5 million jackpot was never paid.

The court did not provide a timeline for when it might rule.

Tipton, 53, had been working for the Urbandale, Iowa-based Multi-State Lottery Association since 2003 and was promoted to computer information security director in 2013. The nonprofit association is operated by 37 mostly state-run lotteries to oversee picking numbers for various games and other lottery game administrative functions.

As an employee, Tipton was prohibited from playing the lottery in Iowa; he was fired after his January 2015 arrest.

"The problem in this case kind of starts with the fact that there's a total lack of evidence to support any of these theories," Stowers argued, pointing specifically to what he said is a lack of evidence to show Tipton had changed the computer number-picking program or had any connection with the people who tried to cash in the lottery ticket.

Assistant Iowa Attorney General Louis Sloven said Thursday that plenty of evidence was presented showing Tipton bought the winning lottery ticket and made deliberate efforts to conceal his identity and construct an alibi. Sloven said it's significant that Tipton lied to FBI investigators about knowing his friend in Texas and told them he was not in the Des Moines area when the ticket was bought although cellphone records show he was.

Tipton's lawyer also argued for overturning the conviction because prosecutors waited more than four years to file charges, outside the three-year statute of limitations. He said the clock started ticking in December 2011, when officials knew something was unusual with the Hot Lotto ticket, though Sloven argued it wouldn't have begun until October 2014, when investigators released the video of the ticket purchase and people recognized Tipton.

Tipton faces a second trial in Iowa on ongoing criminal conduct and money laundering charges alleging he manipulated computers to fix lottery games in Colorado, Kansas,Oklahoma and Wisconsin, and then worked with others to cash the tickets. A previously set July trial date has been delayed and a new date not yet scheduled.

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.

AP, Lottery Post Staff

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11 comments. Last comment 6 months ago by DELotteryPlyr.
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HaveABall's avatar - rocket

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Posted: June 17, 2016, 1:29 am - IP Logged

Thanks Todd and AP for a wonderfully written and fascinating article! Hippy

Having several millions of dollars in my financial accounts means receiving several valuable services each day!

Disney

    LiveInGreenBay's avatar - driver
    Green Bay
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    Posted: June 17, 2016, 6:00 am - IP Logged

    If he's innocent, why did he try to hide his identity?  Guilty as charged!

    Never give up.  Banana

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      Simpsonville
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      Posted: June 17, 2016, 8:00 am - IP Logged

      If he's innocent, why did he try to hide his identity?  Guilty as charged!

      Cry me a river.  These white collar type of criminals think they can get away with most anything.  Too many electronic trackers in use these days.

        mypiemaster's avatar - 2015021003pileofcash
        JACKPOT HUNTER

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        Posted: June 17, 2016, 8:30 am - IP Logged

        It never hurts to try. Stranger things have happened in courts before.

        Seek and ye shall find -Matt. 7:7 ...Ask and ye shall receive -John 16:24 ...Give and it shall be given unto you -Luke 6:38 ...Be careful what you ask for!!! -Mypiemaster 1:1

        Having Money Solves Problems That Not Having Money Creates Yes Nod ****John Carlton****

          noise-gate's avatar - images q=tbn:ANd9GcR91HDs4UJhjxO7cmeMQWZ5lB_FOcMLOGicau4V74R45tDgPWrr
          Bay Area - California
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          Posted: June 17, 2016, 2:09 pm - IP Logged

          Stowers would have us believe that Eddie is a stand up guy, an altar boy-nothing less than a person whose walking with Angels..

          People who say it cannot be done should not interrupt those who are doing it- George Bernard Shaw.

            spartan1707's avatar - Lottery-050.jpg
            Tucson
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            Posted: June 17, 2016, 3:33 pm - IP Logged

            This case should be thrown out. They state that they test each computer before each drawing and that it is totally random...well they say he planted the said virus a month ago sooooooo...all thos drawings are now null and void. They also say that its under constant security watch. They Muliti State Lottery are a for profit company and get contracts from other states stating they can increase profits. Well how can other than RIGGING THE SYSTEM...Picking the lowest picked numbers for all drawings,there are no public eyes to watch the computer drawings. They always release the results late when there are more winners than they like and then say it was a computer glitch. Yeah......

              LiveInGreenBay's avatar - driver
              Green Bay
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              Posted: June 17, 2016, 5:27 pm - IP Logged

              This case should be thrown out. They state that they test each computer before each drawing and that it is totally random...well they say he planted the said virus a month ago sooooooo...all thos drawings are now null and void. They also say that its under constant security watch. They Muliti State Lottery are a for profit company and get contracts from other states stating they can increase profits. Well how can other than RIGGING THE SYSTEM...Picking the lowest picked numbers for all drawings,there are no public eyes to watch the computer drawings. They always release the results late when there are more winners than they like and then say it was a computer glitch. Yeah......

              Yea, this is really weird.  They pre-test all RNG computer draws.  So, did his numbers come up in all those pre-tests for that particular day?  Maybe that guy was just lucky and had to hide his identity because as a lottery official he couldn't play?

              Never give up.  Banana

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                Maryland
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                Posted: June 17, 2016, 5:42 pm - IP Logged

                Yea, this is really weird.  They pre-test all RNG computer draws.  So, did his numbers come up in all those pre-tests for that particular day?  Maybe that guy was just lucky and had to hide his identity because as a lottery official he couldn't play?

                what about if he set up the computer to kick out 1 line of 5 or 10 pre-set lines.  That way he just needed to play all 5 or 10 and he was covered, and reduce the chance of the pre-draw?

                Hoping this judge doesn't kick the case, he needs to be in jail. 

                  Avatar
                  NY
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                  Posted: June 17, 2016, 6:44 pm - IP Logged

                  what about if he set up the computer to kick out 1 line of 5 or 10 pre-set lines.  That way he just needed to play all 5 or 10 and he was covered, and reduce the chance of the pre-draw?

                  Hoping this judge doesn't kick the case, he needs to be in jail. 

                  It's an extremely safe bet that Tipton would have known that some minimum number of pre-drawing tests would be conducted, so there's no logical reason he would have bought tickets for those tests. That doesn't necessarily mean he wouldn't have needed to also play some other combinations, but if he had it would simply be more circumstantial, but very compelling, evidence. Of course that assumes the prosecution was smart enough to check. AFAIK, there hasn't been any news report indicating other tickets were bought.

                  If he only played the set of numbers for the actual drawing there are only two possibilities that I see. One is that there's some setting for the pre-test drawings that differentiates them from the official drawing. In that case MUSL would effectively be running separate programs (or different copies of the same program), even if they use the exact same RNG. I can't see any sensible reason for that. The other possibility is that they always conduct the same number of test drawings. I suppose there's some merit to having a standardized protocol, but you don't need to be very smart to figure out that such a protocol is a major security risk if there's any chance at all that somebody could predict the results of the RNG, and there's always a chance of that, even if it's a very small chance. Either way, it's just another indication that MUSL was (and may still be) pretty clueless about security.

                  The information that has been released since the case began certainly presents an extremely strong case even if there's no absolute proof that he rigged the drawing, but this particular ruling can only be based on the evidence that was presented at the trial. As near as I can tell that evidence was that somebody who was very likely Tipton bought a ticket with the winning numbers, Tipton told some lies (all of which could be explained by not being allowed to play because he was an MUSL employee) and MUSL's claim that he had the opportunity and ability to rig the drawing. AFAIK, at the time of the trial there was absolutely no actual proof that the drawing had been rigged.

                    ArizonaDream's avatar - Lottery-009.jpg

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                    Posted: June 17, 2016, 7:12 pm - IP Logged

                    What I read before was that the rigged code was keyed to produce the desired numbers only on particular dates. It's no great stretch to assume the time was also set. Spit out his numbers only at 9PM on November xx. Pretests at any other time produce normal random numbers.

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                      Maryland
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                      Posted: June 18, 2016, 5:34 am - IP Logged

                      It's an extremely safe bet that Tipton would have known that some minimum number of pre-drawing tests would be conducted, so there's no logical reason he would have bought tickets for those tests. That doesn't necessarily mean he wouldn't have needed to also play some other combinations, but if he had it would simply be more circumstantial, but very compelling, evidence. Of course that assumes the prosecution was smart enough to check. AFAIK, there hasn't been any news report indicating other tickets were bought.

                      If he only played the set of numbers for the actual drawing there are only two possibilities that I see. One is that there's some setting for the pre-test drawings that differentiates them from the official drawing. In that case MUSL would effectively be running separate programs (or different copies of the same program), even if they use the exact same RNG. I can't see any sensible reason for that. The other possibility is that they always conduct the same number of test drawings. I suppose there's some merit to having a standardized protocol, but you don't need to be very smart to figure out that such a protocol is a major security risk if there's any chance at all that somebody could predict the results of the RNG, and there's always a chance of that, even if it's a very small chance. Either way, it's just another indication that MUSL was (and may still be) pretty clueless about security.

                      The information that has been released since the case began certainly presents an extremely strong case even if there's no absolute proof that he rigged the drawing, but this particular ruling can only be based on the evidence that was presented at the trial. As near as I can tell that evidence was that somebody who was very likely Tipton bought a ticket with the winning numbers, Tipton told some lies (all of which could be explained by not being allowed to play because he was an MUSL employee) and MUSL's claim that he had the opportunity and ability to rig the drawing. AFAIK, at the time of the trial there was absolutely no actual proof that the drawing had been rigged.

                      If the prosecution was smart they would hire/use Todd as a consultant on this case - Thumbs Up