By Jason Clayworth and Rachel Denny Clow
Two brothers who spearheaded the biggest lottery scam in U.S. history have repaid less than $1,400 in restitution — despite owning property worth nearly $2 million, a Des Moines Register and Corpus Christi Caller Times investigation has found.
Between them, Eddie and Tommy Tipton have admitted rigging winning drawings in at least five states, including Iowa, worth a combined $24 million.
But they have barely made a dent in the more than $2.4 million they were ordered to pay in restitution, despite holding more than a half-dozen properties in Texas that are worth nearly as much as they owe, according to records obtained by the Register.
At their current rate of repayment, Oklahoma — one of the five state lotteries the brothers scammed — estimates it will be fully reimbursed in 190 years.
"How do these guys slip through the loop every damn time? They're like Teflon," said Allen Weise, a resident of Flatonia, Texas, who provided information about the brothers and their properties to Iowa prosecutors before their 2017 convictions.
A house with a pool in Texas
Eddie Tipton — the mastermind of the "random number" scam and former security chief of the Urbandale, Iowa-headquartered Multi-State Lottery Association — remains in prison serving a 2017 sentence that could last up to 25 years.
His brother, Tommy Tipton — a former justice of the peace from Flatonia, Texas, who admitted helping his brother hijack the world's largest lottery network — served a 75-day jail sentence and has been off probation for 15 months.
Using "random" numbers generated from a computer program designed by his brother at the Multi-State Lottery Association, Tommy Tipton acknowledged he helped to claim prizes in at least two states: Colorado and Oklahoma.
Eddie Tipton was ordered to pay $1,653,874 in restitution, while Tommy Tipton was ordered to pay $804,095.
From prison, Eddie Tipton has paid almost $800, while his brother has repaid $587, court records show.
Yet, the brothers retain full or partial ownership in more than $1.8 million of property in Fayette County, Texas.
Since Tommy Tipton's Sept. 15, 2017, release from jail and probation he has:
- Sold at least two properties with a combined market value of more than $635,000.
- Continued to own his longtime home with a pool valued at almost $780,000.
- Remained the sole owner of at least five business or investment properties that have a combined market value of $572,950.
- Continued as a joint owner with his still-imprisoned brother in at least two properties and mineral rights on a third valued at $105,420.
So far, no state has pursued the legal actions outlined in the Tiptons' plea deals that entitle the defrauded lotteries to lay claim to the brothers' property or to property the Tiptons placed in the names of associates and family members.
When the Register contacted Tommy Tipton, he declined to discuss his current work, income or properties. He said in that brief interview that his brother, Eddie, "ain't never done anything wrong in his life" and vowed the two would once again work together.
"It's hard. I'm a single dad raising three kids on a very limited income with lots of bills, and when Eddie gets home he probably will create something," Tommy Tipton said. "He's a smart, intelligent guy. Hopefully, the future will be better and we'll get all that stuff paid back."
Iowa collection efforts fail
In 2007, Eddie Tipton built a roughly 5,000-square-foot home at 2201 Coolidge St. in Norwalk.
That was two years after he embedded fraudulent computer code into random-number generating software distributed and used by several state lottery games.
The "random number" fraud allowed him to accurately predict at least five winning drawings that totaled more than $24 million in Iowa, Oklahoma, Colorado, Kansas and Wisconsin.
The multi-year scheme ultimately unraveled after a Des Moines convenience store video captured Eddie Tipton in 2010 purchasing a $16.5 million ticket. Iowa Lottery officials refused to cash that ticket after some of Tipton's associates tried on multiple occasions to anonymously redeem the ticket.
After years spent fighting criminal charges, Eddie Tipton pleaded guilty to "ongoing criminal conduct" in 2017.
Iowa prosecutors were aware of his Norwalk home that contained a movie theater and gym, overlooked a pond and sat on nearly 23 acres that he sold in July 2015 for $590,000.
But at the time Tipton sold his home, prosecutors only knew about the Iowa Hot Lotto ticket, which state officials had refused to cash.
In late 2015, prosecutors learned that Tipton had rigged winning lottery drawings in other states.
As a result, Iowa Attorney General Tom Miller's office in March 2016 attempted to gain access to Tipton's Norwalk home; office equipment; multiple vehicles; along with his checking, savings and futures trading accounts.
Eddie Tipton argued in court filings that the lien was unconstitutional because it would interfere with his constitutional right to counsel and result in a deprivation of property without due process. Polk County District Court Judge Brad McCall agreed and dismissed the state's attempt to place liens against the property.
Some of the money Tipton scammed in rigged drawings was acquired a decade before his arrest, records show.
Many banks and financial institutions are not required to maintain records that old, which made it difficult for prosecutors to directly link Eddie Tipton's assets with the winnings, said Rob Sand, a former attorney for the Iowa Attorney General's Office who helped prosecute the Tipton cases.
"Unless we could very specifically and very clearly show that the money he was paying for them (properties) with was stolen money, we couldn't do anything about it," said Sand, who in November was elected as Iowa's state auditor.
Other states stymied
It's "absurd" that states and their lotteries have not taken further action to claim restitution from the Tiptons, Judge Ed Janecka of Fayette County, Texas, told the Register.
Janecka said that in 2015 he successfully urged Tommy Tipton to resign from his elected judicial position because of Tipton's involvement in the lottery fraud.
"This is just wrong, and the states need to come back with a vengeance," Janecka said.
The Register contacted the lotteries and attorney general offices in each state where Tommy Tipton or Eddie Tipton owe restitution: Oklahoma, Colorado, Kansas and Wisconsin.
Conversation is ongoing about which state should take the lead on actions that could result in seizing property, said Jay Finks, a spokesman for the Oklahoma Lottery. Some of the games fraudulently won in the scandal were part of multi-state networks, he noted.
"It kind of creates a layer of complication we're trying to navigate," Finks said.
Sand said the land records the Register obtained should alert states to take further action.
"Our law enforcement team in Iowa did not work hard for three years to now see other states make a minimum effort to collect," Sand said. "Hopefully this is a wake-up call."
What the Tipton brothers owe
Here is what Eddie and Tommy Tipton owe and each state's response to the Register's inquiries.
In Oklahoma and Colorado, portions of the restitution are considered joint payments owed by both brothers, instead of individually. The amounts listed for those states are total amounts owed.
- Amount ordered to be repaid: $644,478 by Eddie and Tommy Tipton
- State response: Conversation continues about which states should take the lead on actions that could result in seizing property, said Jay Finks, a spokesman for the Oklahoma Lottery.
- Amount ordered to be repaid: $1,137,980 by Eddie and Tommy Tipton
- State response: The state received slightly less than $400 of the restitution, said Annie Skinner of the Colorado Attorney General's Office. The office did not respond to questions about why they haven't tried to seize the Tiptons' properties.
- Amount ordered to be repaid: $30,805.60 by Eddie Tipton
- State response: The state has received no payment, said Jennifer Montgomery, a spokeswoman for the Kansas Attorney General's Office. Iowa records indicate Eddie Tipton has paid the state $14.89. Montgomery did not respond to questions about why the state hasn't tried to seize properties.
- Amount ordered to be repaid: $409,600 by Eddie Tipton
- State response: The state has received $198.12, said Patricia Mayers, a spokeswoman for the Wisconsin Lottery. The state did not respond to interview requests to the lottery and the state's attorney general about why haven't sought further court action.
What the Tipton brothers own
Among Eddie and Tommy Tipton's properties and recent transactions identified in public records, the Register found:
- HOME WITH A POOL: Tommy Tipton owns his longtime home with a pool in Flatonia, Texas, with a market value of $779,460. He and his now ex-wife, Pamela, in May 2013 transferred that property to a trust — a financial tool sometimes used to protect property from creditors — that remains in their names. The transfer occurred 15 months after the Iowa Division of Criminal Investigation and the Iowa Attorney General's Office announced they had launched an investigation into the lottery scam.
- BUSINESS OR INVESTMENT PROPERTIES: Tommy Tipton owns at least five other properties in Fayette County, Texas, with a combined market value of $572,950. The most valuable parcel includes 100 acres of native pastureland with a market value of almost $401,000; others include a gas station, a house, a mobile home and a commercial building.
- EDDIE'S HOME OWNERSHIP FROM PRISON: Eddie Tipton owns a 55-acre parcel with a home near Flatonia, Texas, with a current market value of $365,380.
- JOINT OWNERSHIP: Tommy and Eddie Tipton jointly own two properties and mineral rights on a third valued at $105,420 in Fayette County, Texas. The most valuable property is 13 acres of land appraised at $80,750; the other property includes a mini-storage commercial site.
- RECENTLY SOLD: Tommy Tipton sold at least two Fayette County, Texas, properties since his release from jail. In January he sold 102 acres of pasture, and in March he sold a 5.7-acre vacant residential plot. The market values of the properties are listed as $580,730 and $54,490, respectively.
- RECENTLY PURCHASED: On March 25, 11 days after Tommy Tipton sold the 5.7-acre parcel, a home assessed at $36,240 was deeded to his daughter. The mailing address for the property remains the same address as Tommy Tipton's pool home. She did not return requests for an interview.
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.