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Mastermind of lottery fraud will explain how he rigged jackpots

Jun 12, 2017, 9:21 pm

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Insider BuzzInsider Buzz: Mastermind of lottery fraud will explain how he rigged jackpotsRating:

Lottery Post's warning to the lottery industry about computerized drawings, issued more than a decade ago, is about to be confirmed as fact by Eddie Tipton, a former Multi-State Lottery Association (MUSL) security director.

MADISON, Wis. — A lottery programmer will tell investigators how he was able to use his position to rig state jackpots for years and he and his brother will repay $3 million in prizes they improperly claimed, under a plea agreement released Monday.

Prosecutors will seek a 25-year prison sentence for Eddie Tipton, the mastermind of a scheme that rocked the lottery industry. His brother, former Texas judge Tommy Tipton, is expected to face 75 days in jail.

Wisconsin prosecutors released the agreement Monday after Eddie Tipton pleaded guilty to theft and computer crime charges in Madison. The plea was a surprise for Tipton, who had insisted on his innocence for 2½ years and was facing a trial in Iowa next month. The agreement calls for Tipton to soon plead guilty to ongoing criminal conduct in Iowa, and to confess to a civil judgment in Kansas.

"Mr. Tipton's actions defrauding the lottery were a gross violation of the public's trust and confidence," said Wisconsin Attorney General Brad Schimel, praising investigators for "their efforts to find truth and seek justice."

In his job at the Urbandale, Iowa-based association, Tipton wrote and installed code for software that picked random numbers for games sold by its member lotteries. Investigators say Tipton designed his code so that on three days of the year, he could predict winning numbers in some games. The Tiptons and friend Robert Rhodes bought winning numbers for drawings in Colorado, Wisconsin, Iowa, Kansas and Oklahoma between 2005 and 2011. Other associates were involved but haven't faced charges.

The conspiracy unraveled after Tipton was caught on surveillance video buying a winning $16.5 million ticket in December 2010 in Iowa that he, Rhodes and others unsuccessfully tried to claim.

The Tiptons will tell investigators "all facts related, directly or indirectly, to their actions to fix, win, and claim lottery jackpots." They won't face any additional charges based on their testimony but will cooperate with any additional legal actions related to rigged jackpots.

"There's a lot of value in confirming what we believe we know," said Iowa prosecutor Rob Sand, adding that the brothers' cooperation "is going to be helpful to lotteries around the country."

Tipton and his attorneys declined comment. They'll be free to seek a lesser sentence than the 25-year term Iowa prosecutors will seek.

Tommy Tipton's attorney, Mark Weinhardt, said his client was pleased to reach a "sensible resolution" in which he'll serve 75 days after pleading to a misdemeanor.

"Tommy takes full responsibility for his role in this affair," he said. "This agreement will allow Tommy to continue to be the hard-working citizen and loving father to his children that he has been for many years."

The brothers will repay $3 million to Colorado, Oklahoma, Wisconsin and Kansas.

Rhodes, of Sugar Land, Texas, earlier pleaded guilty, agreeing to repay Wisconsin his share of a 2007 jackpot and to testify against his former best friend. Rhodes had described how the two worked together to claim and split the $783,000 Megabucks prize in Wisconsin.

Rhodes told investigators he visited Tipton at his Iowa home in 2007. Tipton gave him index cards containing a series of numbers for him to play for the Dec. 29 drawing — one of the calendar days when Tipton could predict winning combinations. Rhodes drove around Wisconsin in a rental car, buying tickets from various stores before using a limited liability company to claim the prize.

The investigation started with a mystery in 2011. A newly created trust stepped forward hours before a one-year deadline to claim a $16.5 million jackpot. But it refused to tell the Iowa Lottery who purchased the ticket. Iowa declined to pay and launched a criminal investigation.

Investigators got a break in 2014 after releasing video of a man buying hot dogs and the winning ticket at a Des Moines gas station. Colleagues told police the man looked and sounded just like Tipton, who had access to lottery computers. He was convicted of fraud related to that ticket after a 2015 trial, where Tommy Tipton insisted that couldn't have been his brother on the video.

Investigators then looked into whether Tipton had rigged other games after receiving a tip that his brother won a 2005 Colorado lottery. Wisconsin investigators recovered an old computer from the 2007 drawing, and a forensic analysis revealed how Tipton's code worked.

The association, which fired Tipton after his arrest, faces lawsuits by players who claim they were cheated by Tipton's rigging.

They were warned

In August 2004, more than before this scandal exploded, Lottery Post outlined the case against computerized drawings, detailing how they could be rigged by an insider — who could also cover their tracks using software tricks.

The Eddie Tipton scandal followed Lottery Post's warning scenario almost to the letter.

The state lotteries who ignored the warnings and continued using computerized drawings are now suffering unwanted negative attention and lawsuits as a result.

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

2017

AP, Lottery Post Staff

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15 comments. Last comment 3 years ago by DELotteryPlyr.
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Chasing $ Millions.
White Shores- California
United States
Member #136473
December 12, 2012
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Posted: June 12, 2017, 9:44 pm - IP Logged

l knew it was only a matter of time, before Eddie Tipton fell on his sword.

 * Voice of Reason *   

 

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

    music*'s avatar - DiscoBallGlowing
    Fresno, California
    United States
    Member #157851
    August 2, 2014
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    Posted: June 12, 2017, 11:24 pm - IP Logged

     The truth finally wins. This good news is comforting.  Many Thanks! go to this Lottery Post Staff and Todd Northrop. US Flag

    When will COVID-19 be finished?  A vaccine may protect all of us.

      Avatar
      Bellingham, WA
      United States
      Member #86466
      February 4, 2010
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      Posted: June 13, 2017, 12:27 am - IP Logged

      US FlagBut will it change anything as far as the drawings go? Will some one pass a law to convert back to the balls?

        HaveABall's avatar - rocket

        United States
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        March 18, 2009
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        Posted: June 13, 2017, 6:27 am - IP Logged

        I wonder what/who moved him to admit his guilt ... he held onto innocence for so long! Dupe Alert

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

        Disney


          United States
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          March 11, 2015
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          Posted: June 13, 2017, 7:08 am - IP Logged

          The same cheating is going on in tn in the cash 3! I wonder who you get to investigate the lottery?

            konane's avatar - wallace
            Atlanta, GA
            United States
            Member #1265
            March 13, 2003
            5807 Posts
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            Posted: June 13, 2017, 12:23 pm - IP Logged

             The truth finally wins. This good news is comforting.  Many Thanks! go to this Lottery Post Staff and Todd Northrop. US Flag

            Thank you Todd for persisting. We knew you were correct! Party

            Have fun and the best of luck to everyone! Sun Smiley

              Avatar
              Maryland
              United States
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              January 2, 2015
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              Posted: June 13, 2017, 5:42 pm - IP Logged

              I wonder what/who moved him to admit his guilt ... he held onto innocence for so long! Dupe Alert

              Good question, I thought he was going to go down 'denying' the whole way.

                Todd's avatar - Cylon 2.gif
                50
                Chief Bottle Washer
                New Jersey
                United States
                Member #1
                May 31, 2000
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                Posted: June 13, 2017, 6:12 pm - IP Logged

                Good question, I thought he was going to go down 'denying' the whole way.

                My take on this is the weight of the multiple legal cases against him took their toll.  Each would be prosecuted separately, and the cost of defending himself would grow so large that his family would be in poverty in perpetuity.  I think he just saved his family a huge additional burden, and probably helped his brother a bit.

                 

                Check the State Lottery Report Card
                What grade did your lottery earn?

                 

                Sign the Petition for True Lottery Drawings
                Help eliminate computerized drawings!

                  Dd2160's avatar - Lottery-016.jpg
                  USA USA
                  United States
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                  October 22, 2012
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                  Posted: June 13, 2017, 9:36 pm - IP Logged

                  Theifing mofos really tho millions and thats not enough

                  smdh!!!crime does not pay!!

                  420 216 1420 0216 9998 3323 1991

                    OneTrickpony's avatar - rocking horse.jpg

                    United States
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                    July 25, 2015
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                    Posted: June 13, 2017, 9:42 pm - IP Logged

                    Wait, you mean Tommy Tipton only gets 75 days in jail (of which he will probably only serve a week), then gets to go home to Sugar Land, TX  (a wealthy suburb of Houston) and continue being a judge with a large salary and massive pension?

                    Man, he really did win the lottery.

                      Avatar
                      Maryland
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                      Posted: June 14, 2017, 5:33 am - IP Logged

                      My take on this is the weight of the multiple legal cases against him took their toll.  Each would be prosecuted separately, and the cost of defending himself would grow so large that his family would be in poverty in perpetuity.  I think he just saved his family a huge additional burden, and probably helped his brother a bit.

                      AH yes, that would make sense, family is a weakness for all of us. 

                      Once again Todd knows what's going on!

                        Todd's avatar - Cylon 2.gif
                        50
                        Chief Bottle Washer
                        New Jersey
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                        Posted: June 14, 2017, 6:48 am - IP Logged

                        Wait, you mean Tommy Tipton only gets 75 days in jail (of which he will probably only serve a week), then gets to go home to Sugar Land, TX  (a wealthy suburb of Houston) and continue being a judge with a large salary and massive pension?

                        Man, he really did win the lottery.

                        As a felon, I think he would be disbarred.

                         

                        Check the State Lottery Report Card
                        What grade did your lottery earn?

                         

                        Sign the Petition for True Lottery Drawings
                        Help eliminate computerized drawings!

                          RJOh's avatar - chipmunk
                          50
                          mid-Ohio
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                          March 24, 2001
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                          Posted: June 14, 2017, 11:35 am - IP Logged

                          As a felon, I think he would be disbarred.

                          Maybe some politicians in high places thought he was a "good guy" and deserved a break.  Wink

                           * you don't need to buy every combination, just the winning ones * 

                          Thumbs Up       

                            Avatar
                            Kentucky
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                            February 14, 2006
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                            Posted: June 15, 2017, 12:59 am - IP Logged

                            As a felon, I think he would be disbarred.

                            Tommy Tipton's attorney, Mark Weinhardt, said his client was pleased to reach a "sensible resolution" in which he'll serve 75 days after pleading to a misdemeanor.

                            He could be disbarred, but a misdemeanor is not the same as a felony.