The cyber security expert and brainpower behind a lottery rigging scandal that netted $2 million in illegal winnings from five state lotteries pleaded guilty Thursday to a felony charge of ongoing criminal conduct charge.
For the first time in an Iowa courtroom, Eddie Tipton admitted to playing a central role in the rigging scheme after more than two years of adamant denials in the face of mounting evidence against him.
Pursuant a plea agreement, Tipton, 54, now faces spending up to 25 years in prison for using his insider access to manipulate computers that performed drawings for Hot Lotto and other games that he targeted in Iowa, Oklahoma, Wisconsin, Colorado and Kansas.
When a computer selects the winning lottery numbers, it is termed a "computerized drawing". The other type of lottery drawings, which are not capable of being manipulated in this manner, are the kind with real lottery balls drawn from a spinning or agitated drum.
Lottery Post has advocated for the elimination of computerized drawings for more than a decade and described the possibility of this exact scenario many years before it was perpetrated by Tipton. In addition to the outright rigging by Tipton, dozens of computerized drawing errors have been documented by Lottery Post over the years, some of them silently corrupting lottery drawings for months and making huge swaths of purchased lottery tickets incapable of winning.
Lottery executives have stated that computerized drawings are easier for them to coordinate and are cheaper to operate — although the actual savings of computerized drawings is suspect, especially when accounting for a drop in sales due to lower player confidence. Tipton's guilty plea will only create more player distrust.
Tipton arrived in a Polk County courtroom around 8:30 a.m. Thursday wearing jeans and a blue shirt. His brother, Tommy Tipton, who also is pleading to a misdemeanor charge of conspiracy to commit theft, sat on a bench behind him wearing a blue tie.
As part of the plea, Eddie Tipton admitted that he wrote computer code sometime between 2005 and 2006 that allowed him to predict the winning numbers in certain lottery games. Tipton told Judge Brad McCall that when he first wrote the code he wasn't sure if he would ever use it and he did not believe at the time that he was breaking the law. "It was more of a trying to see if I could do it scenario," he said.
"I wrote software that included code that allowed me to technically predict wining numbers and I gave those numbers to other individuals who then won the lottery and shared those winnings with me," he said.
Tipton will be sentenced at a hearing on a later date. Though he faces up to 25 years in prison, there is no mandatory minimum sentence he would have to serve before being paroled. His defense attorneys will also be allowed to argue for a deferred judgment and a suspended prison sentence.
Eddie Tipton worked as the information security director at the Multi-State Lottery Association in Urbandale when he was first arrested in 2015 and charged with two counts of fraud after acquaintances recognized him on surveillance video as the hooded purchaser of a Hot Lotto ticket bought at a Des Moines convenience store. An unsuccessful attempt to cash in on that winning ticket for a $16.5 million prize ultimately led investigators to unwind the years-long scheme involving Eddie Tipton, his brother and a close friend, Robert Rhodes.
Rhodes, a Texas businessman, pleaded guilty to a fraud charge in Iowa and a computer crime charge in Wisconsin earlier this year and agreed to testify for prosecutors against both Tipton brothers. After Tipton's first arrest and conviction, investigators learned that Rhodes won a $783,000 jackpot from the Wisconsin lottery using numbers that he ultimately admitted were given to him by Tipton.
Tommy Tipton, a former Texas justice of the peace, sobbed throughout his own hearing and was immediately sentenced to 75 days in jail. Tipton admitted that he won lottery drawings in Colorado and Oklahoma using numbers that his brother had provided him.
"I apologize for my actions," he said. "It was stupid and unwise."
Eddie Tipton shook hands with Assistant Attorney General Rob Sand, who prosecuted the case, after the judge ended the hearing. Together, the Tipton brothers are expected to pay $3 million in restitution to the lotteries they targeted. Both are required to sit for a so-called "proffer" session with investigators to share details of how the scheme worked.
That information will help state lotteries and gaming organizations make their systems more secure, Sand said.
"Small steps down a darkened path can lead somebody a long way from where they think they are going to be to where they end up," 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
- Best friend to testify against Tipton at July lottery rigging trial, Mar. 31, 2017
- Mastermind of lottery fraud will explain how he rigged jackpots, Jun. 12, 2017
- FBI missed rigged jackpot in 2006 before lottery scheme grew, Jun. 19, 2017
- The 5 lottery jackpots Tipton and his friends stole, Jun. 20, 2017
- Lottery jackpot rigger's Iowa convictions dismissed, Jun. 23, 2017
" trying to see if l could do it scenario "..pretty innocent line there Eddie! Much like bomb manufacturers, who have to carry out tests to see whether it works or not. I sure hope his actions, will bring about the total demise of the RNG.It can't happen fast enough.
Look's like the dark state is "EVERYWHERE" & it operates behind locked rooms in the "DARK" oh>>>HELL>>>>>!!!!
Thanks go to Todd Northrop and the LP Staff for keeping this story up front and available.
Mega Millions and Power Ball are the games that I trust.
Music*- While Eddie has been pleading guilty, have you noticed that the Fantasy five game for tonight is sitting at a Mouth-watering $656,000? Hope you got your ticket.
I think low-player's confidence shall be more visible with PB when there is 1 winner, out of fifty states like when it's 1/2 billion just a week or 2 ago, outlandish. my father even say this alot,it's rigged. That type of huge pot can feed quite well 100 people per state,and still have enough left over.
I trust pick 3, 4 more than any then nc cash five.
GL
Unless the mechanical balls are tampered with Cassie, rigging PB & MM, would be a near impossible. How would you * The rigger- know what numbers players in all 50 States have on their playslips? What if they already marked " advance play?" If it is a live draw, its the purest form of non cheating l could ever imagine. Its those RNG games we need to worry about. If Fast Eddie could have set this up in 05,2 years after the Mars Rovers landed on Mars, imagine the technology in the hands of other savvy cyber security experts out there today?
They have been relentless.
Accessory to the crime..Brother (judge) gets the money and years of good memories...While the coder pays the price. The scales are lopsided.
Both are culpable.
Drawn balls are still open to tampering...Think airflow.
I think you missed the part where they had to payback the money. ($3 million) As far as jail time is concerned, the scales seem balanced to me. The one who did the crime of rigging the drawing gets the brunt of the punishment (although Eddie has not been sentenced yet).
When did Alabama, Alaska, Hawaii, Mississippi, Nevada and Utah get lotteries???
I get your drift, just poking fun, lottery available in 44 states, DC, PR and VI.
Good luck on your lottery ventures!
" When did Alabama, Alaska, Hawaii, Mississippi, Nevada and Utah get lotteries???"- l totally missed that little bit there BB. I will have to don " my collar of shame" for five mins.
Thanks for the laugh!
.
Exactamundo!
I wonder how many years it will take for them to obtain this $3M