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US Senate panel demands info in lottery scandal

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A U.S. Senate oversight panel demanded Wednesday to know how state lotteries are increasing their security measures after an insider allegedly rigged jackpots for years to enrich himself and associates.

Sen. John Thune, chairman of the Committee on Commerce, Science and Transportation, said the allegations of fraud in lottery games offered for sale around the country raise serious concerns. Yet he said it's not clear what the Multi-State Lottery Association, an Iowa-based nonprofit that administers the games, is doing to address them.

In a letter to association leaders, Thune said his committee wants to know by July 7 what steps the group has taken to prevent additional fraud in games that rely on random number generators to pick winning combinations. The Republican fromSouth Dakota said the committee wants the results of any internal investigation conducted into the fraud and details on the assurances the association gives customers about the integrity of games. The committee, which has subpoena power, wants a briefing by July 15.

Investigators say the association's former security director, Eddie Tipton, installed software code that allowed him to predict winning numbers on specific days of the year. They say he then worked with associates to purchase winning tickets with those numbers and collect the prizes. A jury convicted Tipton last year of rigging a $16.5 million Hot Lotto jackpot after he was caught on security camera purchasing the winning ticket at a Des Moines gas station.

Efforts to collect that jackpot failed, but investigators say Tipton and his associates were successful in collecting three others that paid about $2 million in cash in Colorado, Wisconsinand Oklahoma. Tipton also allegedly bought two winning scratch tickets worth $44,000 in Kansas. He is awaiting trial on charges linking him to those prizes.

Tipton's brother, a former Texas justice of the peace, and his friend, businessman Robert Rhodes, are also awaiting trial.

The association is governed by a board that includes the directors of lotteries in 37 states and U.S. territories. It runs the popular Powerball game, which hasn't been implicated in any of the fraud allegations.

Prosecutors say Tipton's scheme relied on his access to random number generators located at the association headquarters and individual state lotteries. They say he installed code after the machine had been audited by a security vendor that directed it to not produce random numbers on certain days and instead use an algorithm that he could predict. All six prizes linked to the alleged fraud were drawn on either Nov. 23 or Dec. 29 between 2005 and 2011.

In his letter, Thune noted that a recent rule change has meant soaring Powerball jackpots, including a record $1.58 billion drawing in January. He said some critics believe "that the excitement about increasingly large jackpots has eclipsed reports of insider fraud and what MUSL is doing to address the issue."

The association fired Tipton after his arrest last year and replaced the machines he worked on. Its board also suspended its founder and longtime director, Charles Strutt, who retired March 31 amid an ongoing search for his replacement.

An oversight committee of the Iowa Legislature launched a similar inquiry earlier this year, and lawmakers say they were convinced that key security changes have been made.

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

2012

2013

2014

2015

2016

AP, Lottery Post Staff

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19 comments. Last comment 6 months ago by Winners.
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Happy California
United States
Member #157856
August 2, 2014
1522 Posts
Offline
Posted: June 22, 2016, 8:48 pm - IP Logged

 Thank You, Todd Northrop, for keeping us updated and informed about the latest news on this crime.

 I know it is serious when the Federal Government gets involved.

 This could influence RNG's in our games. Will they be halted and replaced?

 I've been rich and I've been poor. Believe me, rich is better. 

 Attributed to Joe E. Lewis and others

    Avatar
    Kentucky
    United States
    Member #32652
    February 14, 2006
    7322 Posts
    Offline
    Posted: June 22, 2016, 10:41 pm - IP Logged

    A U.S. Senate oversight panel demanded Wednesday to know how state lotteries are increasing their security measures after an insider allegedly rigged jackpots for years to enrich himself and associates.

    Sen. John Thune, chairman of the Committee on Commerce, Science and Transportation, said the allegations of fraud in lottery games offered for sale around the country raise serious concerns. Yet he said it's not clear what the Multi-State Lottery Association, an Iowa-based nonprofit that administers the games, is doing to address them.

    In a letter to association leaders, Thune said his committee wants to know by July 7 what steps the group has taken to prevent additional fraud in games that rely on random number generators to pick winning combinations. The Republican fromSouth Dakota said the committee wants the results of any internal investigation conducted into the fraud and details on the assurances the association gives customers about the integrity of games. The committee, which has subpoena power, wants a briefing by July 15.

    Investigators say the association's former security director, Eddie Tipton, installed software code that allowed him to predict winning numbers on specific days of the year. They say he then worked with associates to purchase winning tickets with those numbers and collect the prizes. A jury convicted Tipton last year of rigging a $16.5 million Hot Lotto jackpot after he was caught on security camera purchasing the winning ticket at a Des Moines gas station.

    Efforts to collect that jackpot failed, but investigators say Tipton and his associates were successful in collecting three others that paid about $2 million in cash in Colorado, Wisconsinand Oklahoma. Tipton also allegedly bought two winning scratch tickets worth $44,000 in Kansas. He is awaiting trial on charges linking him to those prizes.

    Tipton's brother, a former Texas justice of the peace, and his friend, businessman Robert Rhodes, are also awaiting trial.

    The association is governed by a board that includes the directors of lotteries in 37 states and U.S. territories. It runs the popular Powerball game, which hasn't been implicated in any of the fraud allegations.

    Prosecutors say Tipton's scheme relied on his access to random number generators located at the association headquarters and individual state lotteries. They say he installed code after the machine had been audited by a security vendor that directed it to not produce random numbers on certain days and instead use an algorithm that he could predict. All six prizes linked to the alleged fraud were drawn on either Nov. 23 or Dec. 29 between 2005 and 2011.

    In his letter, Thune noted that a recent rule change has meant soaring Powerball jackpots, including a record $1.58 billion drawing in January. He said some critics believe "that the excitement about increasingly large jackpots has eclipsed reports of insider fraud and what MUSL is doing to address the issue."

    The association fired Tipton after his arrest last year and replaced the machines he worked on. Its board also suspended its founder and longtime director, Charles Strutt, who retired March 31 amid an ongoing search for his replacement.

    An oversight committee of the Iowa Legislature launched a similar inquiry earlier this year, and lawmakers say they were convinced that key security changes have been made.

    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

    2012

    2013

    2014

    2015

    2016

    Sen. John Thune, chairman of the Committee on Commerce, Science and Transportation, said the allegations of fraud in lottery games offered for sale around the country raise serious concerns. Yet he said it's not clear what the Multi-State Lottery Association, an Iowa-based nonprofit that administers the games, is doing to address them.

    It happened almost five years ago and the last time I looked the Hot Lotto game uses the same RNG. We all would like to know why MUSA did nothing about it (and we're not running for re-election).

      music*'s avatar - nw bookeep.jpg
      Happy California
      United States
      Member #157856
      August 2, 2014
      1522 Posts
      Offline
      Posted: June 22, 2016, 11:01 pm - IP Logged

      I hope that MUSLA has changed the policy of who can access the computers. But, I am with Todd when he says, Stop the RNG games.

       I've been rich and I've been poor. Believe me, rich is better. 

       Attributed to Joe E. Lewis and others

        rcbbuckeye's avatar - Lottery-043.jpg
        Texas
        United States
        Member #55889
        October 23, 2007
        5615 Posts
        Offline
        Posted: June 22, 2016, 11:15 pm - IP Logged

        When Terry Rich was on here a few months ago he made it pretty clear that RNG draws were not going away.

        Maybe now that will change after all.

        CAN'T WIN IF YOU'RE NOT IN

        A DOLLAR AND A DREAM (OR $2)

          LiveInGreenBay's avatar - driver
          Green Bay
          United States
          Member #169391
          October 15, 2015
          1249 Posts
          Offline
          Posted: June 23, 2016, 6:27 am - IP Logged

          Who's watching the watchers?

          Never give up.  Banana

            music*'s avatar - nw bookeep.jpg
            Happy California
            United States
            Member #157856
            August 2, 2014
            1522 Posts
            Offline
            Posted: June 23, 2016, 7:18 am - IP Logged

            Who's watching the watchers?

             The ancient Romans would say, "Who guards the guards?".  In Latin or Greek. 

            I Agree!

             I've been rich and I've been poor. Believe me, rich is better. 

             Attributed to Joe E. Lewis and others

              TheMeatman2005's avatar - lightening
              Brooklyn, NY
              United States
              Member #169723
              October 29, 2015
              879 Posts
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              Posted: June 23, 2016, 7:28 am - IP Logged

              Quis custodiet ipsos custodes? is a Latin phrase found in the work of the Roman poet Juvenal from his Satires (Satire VI, lines 347–8). It is literally translated as "Who will guard the guards themselves?", though is also known by variant translations.

              The Meatman

              “The quickest way to double your money is to fold it in half and put it in your back pocket.” Will Rogers

              Winning happens in a flash, Like A Bolt Of Lightning!  Patriot

                TheMeatman2005's avatar - lightening
                Brooklyn, NY
                United States
                Member #169723
                October 29, 2015
                879 Posts
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                Posted: June 23, 2016, 7:31 am - IP Logged

                I wonder if Eddie Tipton had not purchased the "winning" ticket himself, would he have been caught?

                The Meatman

                “The quickest way to double your money is to fold it in half and put it in your back pocket.” Will Rogers

                Winning happens in a flash, Like A Bolt Of Lightning!  Patriot

                  music*'s avatar - nw bookeep.jpg
                  Happy California
                  United States
                  Member #157856
                  August 2, 2014
                  1522 Posts
                  Offline
                  Posted: June 23, 2016, 7:37 am - IP Logged

                  Quis custodiet ipsos custodes? is a Latin phrase found in the work of the Roman poet Juvenal from his Satires (Satire VI, lines 347–8). It is literally translated as "Who will guard the guards themselves?", though is also known by variant translations.

                   Thank You for your educated reply. 

                   We can learn from the ancients and do not need to re-invent the wheel. So to speak.

                   I've been rich and I've been poor. Believe me, rich is better. 

                   Attributed to Joe E. Lewis and others

                    mypiemaster's avatar - 2015021003pileofcash
                    JACKPOT HUNTER

                    United States
                    Member #141034
                    April 2, 2013
                    1410 Posts
                    Online
                    Posted: June 23, 2016, 7:58 am - IP Logged

                    The biggest fraud that is perpetrated on the lottery, which should actually be A BIG SCANDAL, is the taxation of lottery wins. I bet nobody in the senate wants to talk about that.

                    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****

                      TheMeatman2005's avatar - lightening
                      Brooklyn, NY
                      United States
                      Member #169723
                      October 29, 2015
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                      Posted: June 23, 2016, 7:59 am - IP Logged

                       Thank You for your educated reply. 

                       We can learn from the ancients and do not need to re-invent the wheel. So to speak.

                      I can not take the credit. It wasn't an educated reply, it was GOOGLE

                      The Meatman

                      “The quickest way to double your money is to fold it in half and put it in your back pocket.” Will Rogers

                      Winning happens in a flash, Like A Bolt Of Lightning!  Patriot

                        TnTicketlosers's avatar - Lottery-065.jpg

                        United States
                        Member #71120
                        February 19, 2009
                        1209 Posts
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                        Posted: June 23, 2016, 8:37 am - IP Logged

                        So that tells me that TIPTON fixed the Tennessee computers when he visited in 2004,,,why no one ever wins or shown on line as winners......interesting....I cant wait till it all goes down..and certain people are caught.

                          LiveInGreenBay's avatar - driver
                          Green Bay
                          United States
                          Member #169391
                          October 15, 2015
                          1249 Posts
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                          Posted: June 23, 2016, 9:29 am - IP Logged

                          The biggest fraud that is perpetrated on the lottery, which should actually be A BIG SCANDAL, is the taxation of lottery wins. I bet nobody in the senate wants to talk about that.

                          If they could tax it at 100 percent....They would.

                          Never give up.  Banana

                            HoLeeKau's avatar - YheaShea
                            Idaho
                            United States
                            Member #94283
                            July 17, 2010
                            2284 Posts
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                            Posted: June 23, 2016, 1:56 pm - IP Logged

                            I wonder if Eddie Tipton had not purchased the "winning" ticket himself, would he have been caught?

                            My guess is he wouldn't have been caught.  I assume his other accomplices gave him part of their winnings.  His downfall was greed.  His share of the others wasn't enough, he had to go for more.  And he was too greedy to share it with a frontman on the last one so he bought it himself. 

                            Had he stopped after he had accumulated a few million and called it good, he almost certainly wouldn't have been caught.  If he had shared the last 12 mil ticket with a frontman, he still probably wouldn't have been caught, but who knows?  Greed, greed, greed.