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Man files lawsuit over rigged lottery jackpots

Insider BuzzInsider Buzz: Man files lawsuit over rigged lottery jackpots
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Hopes to achieve class action certification

Hundreds of thousands of lottery players who were allegedly cheated by an insider's long-running scheme to rig jackpots should be reimbursed for their losing tickets, according to a lawsuit filed Wednesday that seeks class action certification.

Lawyers filed the consumer fraud case against the Multi-State Lottery Association, the Iowa-based nonprofit that helps administer games that are offered by state lotteries. It alleges the association failed to prevent games from being rigged and failed to operate them in accordance with their own rules.

The association's former security director, Eddie Tipton, is charged with installing software on lotteries' random number generators that allowed him to predict winning numbers on three days of the year.

Prosecutors say Tipton worked with his brother and a longtime friend to buy winning tickets worth millions between 2005 and 2011 in Colorado, Wisconsin, Iowa, Kansas and Oklahoma. The alleged scheme unraveled after Tipton was caught on surveillance video buying a winning $16 million Hot Lotto ticket in December 2010 that others would unsuccessfully try to cash a year later.

The plaintiff in the lawsuit, 53-year-old insurance salesman Dale Culler of Burlington, Iowa, kept the $45 in tickets that he played in that drawing, along with a detailed ledger of all games he plays.

"While I know the odds aren't great, I never expected that the games were fixed and my chance was zero," he said in a statement.

The lawsuit, filed in Iowa district court in Des Moines, argues that Culler should serve as the representative for a class that would consist of all those who bought tickets for games on dates in which winning numbers were made predictable by Tipton's software. It alleges that hundreds of thousands of lottery players lost money and should be reimbursed plus interest.

Allowing them to join as a class would be more economical than pursuing individual lawsuits because the amount each player lost is relatively small compared to the expense of suing the association, the lawsuit argues. The games known to be at issue include Hot Lotto, Colorado Lotto, Wisconsin Megabucks and Kansas 2X2, but the litigation could uncover others, said one of the plaintiff's attorneys, Nicholas Mauro.

He said the lawsuit will ask a judge to find the association liable for the rigged games first, and to certify the group as a class later. He said that players who did not keep their tickets should be allowed to join the class by filing a sworn statement of their participation, a form of proof allowed in some jurisdictions.

Investigators say Tipton installed software on the random number generators that worked as intended 362 days of the year, but directed them to produce predictable numbers May 27, Nov. 22 and Dec. 29 if the drawings also occurred on Wednesdays or Saturdays after 8 p.m. Even then, Tipton wouldn't know the precise winning combinations but that they'd be predictable.

Investigators alleged in a filing last month that Tipton supplied his friend, Texas businessman Robert Rhodes, with several index cards with potential winning combinations written on them and instructed him to play them all for a Wisconsin Megabucks game to be drawn Dec. 29, 2007. After driving around Wisconsin in a rental car buying them at different stores, Rhodes won and split the $783,000 cash jackpot with Tipton, the filing says.

The association has argued that Tipton, who was fired after his arrest, acted alone. Still, the group's board ousted longtime executive director and founder Chuck Strutt in the wake of the scandal and has also made numerous security improvements.

The lawsuit is the first potential class action to arise from the jackpot-rigging allegations and the second suit overall. The first was filed on behalf of Iowa financial planner "Lucky" Larry Dawson, who won a $9 million jackpot in 2011 but contends it should have been worth $25.5 million had the prior drawing not been rigged. A judge ruled in October that the case can move forward.

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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21 comments. Last comment 3 days ago by dallascowboyfan.
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mypiemaster's avatar - 2015021003pileofcash
JACKPOT HUNTER

United States
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April 2, 2013
1419 Posts
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Posted: January 4, 2017, 9:04 pm - IP Logged

This guy Tipton sure gets around. Good luck with the lawsuit.

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****

    Groppo's avatar - cat anm.gif

    United States
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    January 7, 2015
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    Posted: January 5, 2017, 12:02 am - IP Logged

    This guy Tipton sure gets around. Good luck with the lawsuit.

    .

    My Pie Master,

    Yes indeed.  I agree. Plus, I like reading your posts, so I can look at your avatar and dream.  I dream one day that pile of loot will be mine, and I can stuff my pockets with as much of that paper loot as they can hold.

    I dream of walking down the street one day - and everyone will see me and say
    "There goes Charlie Potatoes.  . . . . ". and the like.   (see the move: "The Defiant Ones")

    Mr. Groppo

    • Don't chase the numbers you play.
    • Play only numbers you've already played, plus however many random picks.
    • But, ALWAYS the regular numbers you play.  This will make you a winner, not a chaser.
              (so far, though, I've yet to win any significant lotto prize)
      Avatar
      USA
      United States
      Member #172127
      January 16, 2016
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      Posted: January 5, 2017, 7:33 am - IP Logged

      I was wondering how long It would take before this happened!

      Glad they finally filed a Lawsuit and I really HOPE THEY WIN.

      GOOD LUCK!

       CAN'T Wait till a LP POSTER WINS BIG Party

        wander73's avatar - Lottery-038.jpg
        Philadelphia, PA
        United States
        Member #153774
        March 24, 2014
        1186 Posts
        Online
        Posted: January 5, 2017, 11:44 am - IP Logged

        I was wondering how long It would take before this happened!

        Glad they finally filed a Lawsuit and I really HOPE THEY WIN.

        GOOD LUCK!

        Win big.   It depends on the courts,  prosecutor and defense team.   They will have to work out a plea agreement. 

         

        It's just like pharmacutical companies.   My dad passed away last Feb from heart attack.  He was diabetic.  He took pradaxa as that medicine was advertised for a major lawsuit.  Now the companies have backup funds for I believe $660 million dollars.  I and my mom are hoping to recover and receive at least close to half million dollars. 

         

        It all depends what is in the settlement and hopefully this person doesn't file bankruptcy.

          Avatar
          Kentucky
          United States
          Member #32652
          February 14, 2006
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          Posted: January 5, 2017, 1:48 pm - IP Logged

          By trying to prove Tipton rigged the drawings, the lotteries involved are proving they indirectly cheated players. But for repaying the players, it's really not much different than when the TN Lottery's RNG was programmed for no repeat digits in their pick-3 and pick-4 games. The players that didn't throw away their tickets, were given an equal value ticket in future drawings.

          The problem here is who keeps losing lottery tickets for over years?

            cbr$'s avatar - maren
            Cordova,Al.
            United States
            Member #104482
            January 15, 2011
            5422 Posts
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            Posted: January 5, 2017, 7:15 pm - IP Logged

            By trying to prove Tipton rigged the drawings, the lotteries involved are proving they indirectly cheated players. But for repaying the players, it's really not much different than when the TN Lottery's RNG was programmed for no repeat digits in their pick-3 and pick-4 games. The players that didn't throw away their tickets, were given an equal value ticket in future drawings.

            The problem here is who keeps losing lottery tickets for over years?

            The IRS , suggest that you keep your losing tickets for seven year if it a loser. You can subtract
            your losers from your winning on your taxes. 
              Avatar
              Kentucky
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              Member #32652
              February 14, 2006
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              Posted: January 5, 2017, 9:35 pm - IP Logged
              The IRS , suggest that you keep your losing tickets for seven year if it a loser. You can subtract
              your losers from your winning on your taxes. 

              I can't find the "seven year" rule, but it could apply to keeping records of losses for the years the losses are claimed on Schedule A. I'm not sure if you can claim losses from up to seven years ago.

                Avatar
                Simpsonville
                United States
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                January 22, 2015
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                Posted: January 6, 2017, 5:17 am - IP Logged

                I can't find the "seven year" rule, but it could apply to keeping records of losses for the years the losses are claimed on Schedule A. I'm not sure if you can claim losses from up to seven years ago.

                My understanding is the IRS says to keep returns for seven years in case of an audit.  As for gambling (casinos) you get a win/loss statement from the respective casino and write off any winnings, within reason, through the losses you incurred.  Don't give them any red flags to signal an audit.

                  RJOh's avatar - chipmunk
                  mid-Ohio
                  United States
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                  March 24, 2001
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                  Posted: January 6, 2017, 9:33 pm - IP Logged

                  By trying to prove Tipton rigged the drawings, the lotteries involved are proving they indirectly cheated players. But for repaying the players, it's really not much different than when the TN Lottery's RNG was programmed for no repeat digits in their pick-3 and pick-4 games. The players that didn't throw away their tickets, were given an equal value ticket in future drawings.

                  The problem here is who keeps losing lottery tickets for over years?

                  How did the lottery cheat anyone?  Tipton knowing the results before the drawing gave him an unfair advantage but didn't prevent other players playing the winning combination.  If players with tickets for that game get their money back they will be lucky considering players who won smaller prizes won't be expected to pay back their winnings.

                  Facts are the jackpot was never collected and unclaimed jackpots have never  been paid out to players of future games.

                   * you don't need to buy more tickets, just buy a winning ticket * 
                     
                               Evil Looking       

                    dr65's avatar - black panther.jpg
                    Pennsylvania
                    United States
                    Member #74096
                    May 2, 2009
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                    Online
                    Posted: January 7, 2017, 12:23 pm - IP Logged

                    It's the class action craze. Get everyone in on the big money then split it so many ways, you're embarrassed to admit you
                    even participated.
                    There should be a law against lawyers making out on lawsuits like these.

                      Teddi's avatar - Lottery-008.jpg

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                      Posted: January 7, 2017, 9:44 pm - IP Logged

                      Here's to hoping this lawsuit gets tossed or the award is zero. Tipton may have guaranteed himself a win but he didn't deny a win to anyone else. This guy's chance of hitting the winning numbers was no greater or worse than at any other draw.

                      If even one non-Titpton associate won even one dollar on any of these drawings, then the claim he had zero chance of winning doesn't hold up. 

                       

                      Had the lawsuit been filed on the grounds that the numbers were NOT randomly generated as they are required to be, THEN I'd agree with filing for compensation. That's a claim that makes sense and can pass the sniff test.

                      If the numbers aren't randomly generated or randomly drawn, then a win or non-win can't be counted as accurate. All results are therefore void. But this lawsuit is only looking at one aspect of voiding the results. One can't claim a loss shouldn't count as a loss for a particular drawing because of fraud, without also acknowledging that a win can't count as a win. 

                       

                      Stating that Tipton's rigged drawings zeroed out the results for everyone who played on those dates and lost means that the people who won non-jackpot prizes can be asked to return their winnings. There's already a parallel legal precedent to do so in financial fraud cases.

                        noise-gate's avatar - images q=tbn:ANd9GcR91HDs4UJhjxO7cmeMQWZ5lB_FOcMLOGicau4V74R45tDgPWrr
                        Bay Area - California
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                        Posted: January 7, 2017, 10:43 pm - IP Logged

                        Here's to hoping this lawsuit gets tossed or the award is zero. Tipton may have guaranteed himself a win but he didn't deny a win to anyone else. This guy's chance of hitting the winning numbers was no greater or worse than at any other draw.

                        If even one non-Titpton associate won even one dollar on any of these drawings, then the claim he had zero chance of winning doesn't hold up. 

                         

                        Had the lawsuit been filed on the grounds that the numbers were NOT randomly generated as they are required to be, THEN I'd agree with filing for compensation. That's a claim that makes sense and can pass the sniff test.

                        If the numbers aren't randomly generated or randomly drawn, then a win or non-win can't be counted as accurate. All results are therefore void. But this lawsuit is only looking at one aspect of voiding the results. One can't claim a loss shouldn't count as a loss for a particular drawing because of fraud, without also acknowledging that a win can't count as a win. 

                         

                        Stating that Tipton's rigged drawings zeroed out the results for everyone who played on those dates and lost means that the people who won non-jackpot prizes can be asked to return their winnings. There's already a parallel legal precedent to do so in financial fraud cases.

                        I Agree! Teddi. In fact this is a no brainier *for me.When Tipton rigged it, he did not do so in a manner that precluded anyone else from having the winning numbers for that particular drawing as well. As with any jackpot, if you did not pick the correct numbers, it's your fault- no one else's.

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

                          Avatar
                          NY
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                          Member #23835
                          October 16, 2005
                          3502 Posts
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                          Posted: January 9, 2017, 1:44 am - IP Logged

                          "How did the lottery cheat anyone?"

                          That's the question the defense will be asking, and the plaintiff will need to have a compelling answer. That a crime causes harm to people besides the primary target doesn't make the target responsible for the injury to others unless the target somehow contributes to those injuries. I'll happily agree that the lottery's security protocols were seriously deficient, but they allowed Tipton to (presumably) take advantage rather than causing him to take advantage.

                          "unclaimed jackpots have never  been paid out to players of future games."

                          The rigged game didn't have an unclaimed jackpot. It had a jackpot that was never won. The rules for Hot Lotto clearly say that jackpots that aren't won are supposed to be rolled over and paid to the winner(s) of the first future game that sells a valid winning ticket(s).

                           

                          "Tipton may have guaranteed himself a win but he didn't deny a win to anyone else."

                          Of course he did. Given the odds of the game it's a virtual certainty that some other combination would have been drawn if he hadn't rigged it to draw the combination he chose. He didn't do anything that prevented others from playing the combination that he caused to be drawn, but every single person who played a different combination had zero chance of winning the jackpot. Depending on the individual numbers they played their chances of winning a smaller prize would also have been reduced or eliminated. At the very least thousands of small prizes would have gone to different players, and there's a chance that the major prizes would also have been won by other players.

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                            San Diego, CA
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                            February 12, 2008
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                            Posted: January 11, 2017, 3:59 pm - IP Logged

                            This seems like a clear cut win for the plantiffs.