It took Texas businessman Robert Rhodes more than a year to turn against his "good old boy" best friend after he realized that Eddie Tipton would not do a deal and tell prosecutors about how he had created an elaborate system to rig lotteries in five states.
But despite fear for his safety, Rhodes is poised to give testimony at a trial scheduled for July 10 in Des Moines that prosecutors hope will finally put Tipton behind bars a decade after launching a scheme that netted $2 million in jackpots.
"Here is my best friend. And my best friend, he's a big boy. And he's a good old boy. And in Texas good old boys have lots of guns and they have pickup trucks," Rhodes said in a deposition after he agreed to testify against Tipton. "A good old boy might get pissed off and come after you."
Tipton's job at the Urbandale, Iowa-based Multi-State Lottery Association was to write software designed to pick numbers for lottery computers used for games by 37 state and territories.
Rhodes told attorneys at the deposition that Tipton would visit him at his home in Texas and they'd sit in the backyard under a tree on outdoor furniture by a chiminea stove and talk. At one point, Rhodes said Tipton told him that he'd created computer code that allowed him to predict lottery numbers for certain games on certain dates.
"I think that would be, you know, rigging the system," Rhodes said.
Rhodes, who has known Tipton since the early 1990s when they were in business together in Texas, has entered plea agreements in Iowa and Wisconsin in which he promised to testify against Tipton.
Rhodes is prepared to explain how Tipton, the computer programmer's brother Tommy Tipton, a former Texas judge, and Rhodes played a series of numbers on certain dates.
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 they'd be predictable.
Rhodes said for the Wisconsin game Tipton gave him cards with hundreds of numbers on them to play and one of them hit the jackpot.
Once they won, they sought out friends and family members to cash the tickets for a share of the winnings.
The scheme defrauded seven lottery games in five states from 2005 to 2011, prosecutors say.
Iowa Assistant Attorney General Rob Sand has said the conspiracy included jackpots from two 2005 Colorado lottery tickets, the 2007 Wisconsin MegaBucks ticket, two 2010 Kansas 2by2 tickets and a 2011 Oklahoma Hot Lotto ticket.
Prosecutors will present testimony at Tipton's upcoming trials that they've found his code on computers in Iowa, Colorado, Oklahoma, Wisconsin, Kansas, Indiana and Arkansas.
The program code on the Indiana and Arkansas computers apparently hadn't yet been used.
Tipton's attorney, Dean Stowers, said the programs were certified by third-party vendors responsible for verifying the random function and at no time flagged anything unusual. He denies Tipton did anything illegal.
The scheme was uncovered when the group tried to cash the $16.5 million jackpot from a December 2010 Hot Lotto ticket. Iowa Lottery officials became suspicious when a group of attorneys tried to cash the ticket without revealing who bought it.
For agreeing to testify, Rhodes avoids prison time and will be allowed to serve six months of home confinement in Texas and two years' probation. He must pay $409,000 in restitution to Wisconsin, which includes his half of the jackpot and tax refunds he received from the state.
Rhodes, 47, said he decided to confess in December of 2015 after Iowa prosecutors charged him and pressured him to testify against Tipton. The father of three children, Rhodes said he worried he'd be sent to prison for decades. He also said he believed Tipton made the wrong decision to not accept responsibility when he turned down a plea deal earlier in 2015 and went to trial.
Tipton was convicted of two counts of fraud and sentenced to 10 years in prison. But he remains free while he appeals the convictions. One count was overturned by the Iowa Court of Appeals last year and the other is before the Iowa Supreme Court. A ruling is expected soon.
"My actions were wrong, and my plea agreement there, that says that," Rhodes says in the deposition. "My business is gone. I can't do what I did. So that shows, you know, I know I'm wrong," he said.
In an ironic twist, Rhodes says he also was defrauded of $125,000 of the Wisconsin lottery winnings by a Caribbean insurance scheme.
He said a financial adviser suggested buying a business insurance policy that would give him significant tax breaks. He collected $180,000 in Wisconsin tax refunds and from the federal government but the insurance company shut down and "absconded with all of the money that was left in that policy," he said.
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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
- 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
2012
- 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
2013
- 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
2014
- Iowa Lottery still hunting mystery Hot Lotto winner [video], Oct. 10, 2014
2015
- 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
2016
- 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
- Investigators find Tipton's software code to rig computerized lottery drawings, Apr. 7, 2016
- Lottery rigging scandal prompts security audit in South Dakota, Apr. 13, 2016
- Preliminary hearing rescheduled for Tommy Tipton in lottery rigging case, Apr. 22, 2016
- Third suspect surrenders in national lottery rigging scandal, Apr. 28, 2016
- Lottery scam investigation comes to Tennessee, May 11, 2016
- Investigators find another friend of Tipton who cashed rigged lottery prize, May 11, 2016
- Convicted computerized drawing fraudster argues Iowa court appeal, Jun. 16, 2016
- US Senate panel demands info in lottery scandal, Jun. 22, 2016
- Lottery rigging trial to be moved out of Des Moines, Jun. 27, 2016
- Eddie Tipton's new trial delayed until 2017, Jul. 1, 2016
- Iowa court reverses part of Tipton's lottery fraud conviction, Jul. 28, 2016
- Internal investigation concludes Tipton acted alone to rig lottery drawings, Aug. 10, 2016
- Prosecutors say 2 more men may be linked to lottery riggings, Aug. 24, 2016
- Judge: winner's lawsuit in lottery-fixing case can continue, Oct. 13, 2016
- Alleged lottery scandal conspirator to enter new plea, Nov. 14, 2016
- Accused lottery rigger Eddie Tipton facing new Wisconsin charges, Dec. 22, 2016
2017
- Man files lawsuit over rigged lottery jackpots, Jan. 4, 2017
- Trials for Tipton brothers charged in lottery scandal delayed, Jan. 8, 2017
- Former MUSL official received severance amid lottery jackpot scandal, Jan. 10, 2017
- Texas man pleads guilty to fraud in lottery scandal case, Jan. 11, 2017
- Iowa Supreme Court hears lottery rigging case, Feb. 14, 2017
- Kansas files lawsuit against accused lottery rigger, Mar. 16, 2017
With friends like these...
IKR.
Exactly . . .
Sad thing about all this is the Lottery still Using Computer generated Numbers. Only them knows why. Probably so they can Rig the lotto themselves. If they cares so much about players they will stop RNG and use balls. CROOKS
They became too greedy and that's when they got caught. If they had settled for second and third prizes they might still have defrauded the lotteries.
For some reason, I just don't completely trust the word of people that testify in exchange for keeping themselves out of prison. It seems to me that gives temptation to lie.
Yuuuup, that's what RATS do. They will snitch on granny to save their own behinds. In the end, they end up losing their heads anyway. If you are willing to partake in the proceeds of a criminal enterprise, you should then put on your big-boy pants and do your time when caught. Snitching and crying are not allowed, because you will be caught eventually and you should know that.
By trying to prove Tipton rigged the games, they are proving their games can be rigged and are still cheating the few foolish people that continue to play.
Second prizes for most lottery games just aren't that attractive unless they are MM or PB.
they are win they keep stacking up and nobody knows about it, GREED will get u caught everytime!
Arizona had issues with its Pick 3 around the same time frame as all of this was going on. I wonder if Eddie had a hand in that.