
In 2005, three people won a Colorado Lotto jackpot worth $4.8 million, and Boulder's Amir Massihzadeh held one set of winning numbers.
He accepted his prize of $568,990 — after splitting the pot and paying taxes — and moved on with life.
Ten years later, Colorado Bureau of Investigation agents visited Massihzadeh to interview him about his winning number because they were investigating a criminal scheme to rig lotteries. They suspected the other two ticket-holders who split the prize with Massihzadeh had cheated.
Massihzadeh, who let the computer choose his numbers, was not suspected of wrongdoing.
Even after the other two were convicted in the scam, the Colorado Lottery refused to award the full jackpot to Massihzadeh, saying he was locked into a contract when he signed the original ticket.
Thus began a years-long court battle between Massihzadeh and the state lottery over whether or not he is entitled to the full $4.8 million jackpot. On Tuesday, the Colorado Court of Appeals will hear the case to interpret exactly how contracts between lottery winners and the state should work.
"If an honest person plays a game by the rules, but other players cheat to win and get caught, then the honest player should get the whole jackpot and the cheaters should not get anything," Robert Duncan, one of Massihzadeh's attorneys, said in an email to The Denver Post. "But when we went to the state, it said it did not owe our client anything."
Massihzadeh declined an interview, but his lawyer said his client isn't mad or frustrated. He simply believes the entire jackpot is rightfully his.
Lottery officials referred questions about the case to the Colorado Attorney General's Office, which declined comment because of pending litigation.
When Massihzadeh won nearly 14 years ago he never considered there would be a problem, Duncan said.
What he — and state lottery officials — did not know was that a man in Iowa who worked as director of information security for the Multi-State Lottery Association was installing code to help him and his brother forecast likely winning numbers. The Multi-State Lottery Association is a nonprofit organization owned and operated by 33 state lottery systems, including Colorado's, which use the association's computer system to generate winning numbers.
Eddie Tipton, the security director in Iowa and the mastermind behind the scam, had manipulated the computer program so that he would be able to predict winning numbers, according to previous reports on the scam. Tipton designed the software so that it only operated on certain dates and was dormant the rest of the time to avoid detection. But on those certain dates, odds were high that Tipton knew the numbers that would be chosen.
Tipton provided those potential winning numbers to his brother, Tommy Tipton, who also shared them with others.
After the Nov. 23, 2005, Colorado Lotto numbers were announced, Tommy Tipton, who had received a notepad with likely winning combinations from his brother, gave his winning ticket to a friend, who claimed a lump-sum payout.
Tommy Tipton also had shared those combinations with someone else, and the third winning number was claimed by a Las Vegas limited liability company called Cuestion de Suerte, which also asked for a lump-sum payment.
But the Tiptons got caught after the Iowa Lottery investigated suspicious circumstances surrounding a $16.5 million Hot Lotto ticket purchased in December 2010.
The Tiptons were required by court order to pay Colorado $1,137,980 in restitution: the total amount paid out by the state for the two rigged lottery tickets. They were also ordered to pay restitution in Oklahoma, Wisconsin and Kansas, according to Colorado's response brief in the Court of Appeals case.
The state said in its court filing that the Tiptons have not paid any of the restitution to Colorado and are unlikely to do so. Eddie Tipton is serving two consecutive five-year sentences in the Iowa state prison, it stated.
After the Tiptons' scheme was busted, that left Massihzadeh as the lone holder of a winning Lotto ticket.
Massihzadeh and his attorneys went to the Colorado Lottery to ask for the full payout.
"These criminals knew what no one else did: what the potential winning combination of numbers would be. They were not playing a game of chance like all the honest players," Massihzadeh's attorneys wrote in their opening brief before the appeals court. "For the honest players, like Mr. Massihzadeh, the drawing was still a fair and random game of chance because they had the same opportunity to win when competing against other honest players."
Lottery officials said they did not owe Massihzadeh anything. The original payout was set in a contract both parties had signed, the lottery determined.
Massihzadeh sued.
But a Denver District Court judge dismissed the lawsuit in February 2018, agreeing with lottery officials that Massihzadeh was bound by the original contract.
The state has argued that Colorado law says the lottery cannot be held liable after earnings are paid, and that it technically did not have contracts with the Tiptons because other people claimed the winnings. The criminal convictions had no bearing on Massihzadeh's claim because the winner's shares are determined by the number of matching tickets, not the means by which a player purchases a ticket, the lottery said.
"Massihzadeh, unaware of the fraud, purchased a quick pick ticket. He now claims that the Division's payment of two-thirds of the jackpot to the other ticket holders breached his own contract with the Division," the Colorado Lottery argued in its brief before the appeals court. "In doing so, he entirely disregards the terms of that contract. He also ignores the obvious — he was an unknowing beneficiary of the fraud, not a victim of it. The Division was defrauded of at least $1.6 million in prize money in 2005. Massihzadeh now asks the Division to pay this amount a second time."
On Tuesday, before an audience of high school students in Trinidad, Massihzadeh's lawyers will try to convince the appeals court their client deserves the money and to reverse the district court's decision.
And if he loses?
"He certainly hopes the Court of Appeals will agree with his position, but, if not, then his life will continue to be as good as it has been since 2005," Duncan said.
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
- IT'S OFFICIAL: Tipton pleads guilty to rigging computerized lottery drawings, Jun. 29, 2017
- Lottery rigging accomplice used Wisconsin payout for offshore tax scam, Jul. 6, 2017
- Hot Lotto multi-state lottery game to end in October, Aug. 9, 2017
- Lottery rigging mastermind sentenced to 25 years in prison, Aug. 22, 2017
- Winner sues Colorado Lottery 12 years after rigged drawing, Oct. 5, 2017
2018
- Lottery scammer rigged more drawings than first thought, records show, Feb. 19, 2018
- How a gaming geek with a checkered past pulled off the biggest lottery scam in U.S. history, Mar. 16, 2018
- Infamous lottery scammer says US computerized lottery drawings remain fatally flawed, Mar. 19, 2018
- Iowa Lottery wins International Gaming-Compliance award for work in lottery rigging investigation, Apr. 19, 2018
- The man who cracked the lottery, May 3, 2018
- Memo: Iowa Lottery kept selling games after security warning, Aug. 1, 2018
- Investigation finds lottery scamming Tipton brothers have repaid virtually nothing, Dec. 27, 2018
2019
Tiptons @ it again!
After all these years I say cut your losses, enjoy your over $500K prize and get on with your life.
Though he MAY have been an unwittingly participant in that Tipton mess, I don't foresee him gaining anything and his Attorney getting richer. IDK.
The article states that "In 2005, three people won a Colorado Lotto jackpot worth $4.8 million, and Boulder's Amir Massihzadeh held one set of winning numbers.
He accepted his prize of $568,990 — after splitting the pot and paying taxes — and moved on with life."
If $4,800,000 divided by three is $1,6000,000 and the federal tax rate for 2005 was 35% and the Colorado income tax rate was 4.63%, then
$1,600,000 x 35% = $560,000
4.63% = $74,080
Total taxes due = $634,080 which should have left $965,920.
Why did he get only $568,990?
By my calculations, he should have received approximately $965,920
Lump sum amount is less than if paid as an annuity.
Ahhhh. Brain fart on my part. I forgot about that.
The state said in its court filing that the Tiptons have not paid any of the restitution to Colorado and are unlikely to do so.
That's Colorado's problem, not Massihzadeh's. It's irrelevant to the case unless CO is making the argument that it doesn't have the money to pay Massihzadeh, which it isn't. CO is only making the argument that they don't have to pay Massihzadeh due to contract. In fact, the CO Lottery has its financial report prominently displayed on its website, showing the lottery to be very profitable and solvent.
According to a DesMoines Register article from December 2018, the Tipton brothers are still worth about 1.8 million, so it is not as if CO can never get their money back, it's that CO simply chooses not to pursue restitution. I think CO weakens its case by mentioning this stuff about not getting its restitution from the Tiptons. It should just stick to the issue of contract.
Frankly, it's such a small amount of money at stake, if I were Massihzadeh I would cut my losses and move on with my life.
Criminals ruin life for the rest of us.
Equal Justice for all.
The wording that will drive a stake through Duncan’s lawsuit..
“ The division was defrauded of at least $1.6 million in prize money in 2005.Massihzadeh now asks the Division to pay this amount a second time.” Hit the road Jack and don’t.....
Ten years later, Colorado Bureau of Investigation agents visited Massihzadeh to interview him about his winning number because they were investigating a criminal scheme to rig lotteries. and Massihzadeh, who let the computer choose his numbers, was not suspected of wrongdoing.
I guess it's possible to make a self pick look like a QP, but the lottery has the ticket and know exactly what it was and where it was purchased. So it's baffling as to why they interviewed Massihzadeh.
There are legal precedents when there were multiple winning tickets and when one or more those prizes never collected, the other winners sued. In the cases I saw, each time the court ruled in favor of the lottery. This case is much different because the Colorado Lottery did payout the other prizes. There may be a case if the prize money is returned; good luck with that.
We'll probably read stories about the "Tipton effect" for years, so why are states like Colorado still using the same type of drawings they know can be rigged?
After reading this article, I'm not taking sides. The state has an interesting position in saying that Amir would not have won with his quick pick had Tipton not forced those numbers to come up, and essentially be grateful he got what he did from Tipton's fraud.
You make a valid point- Amir was a beneficiary of Tipton’s scheme. If anything, Amir should be thanking Eddie for getting something out of a drawing Tipton set up.
You are both wrong. Tipton's scheme allowed him to know what possible group of numbers would come and a possible time frame. It did not make the computers generate the numbers themselves so the quick pick was a legitimate win and Amir was not a beneficiary of Tipton's fraud.
Ok, you win. It was a shot in the dark. First mistake of the year, not bad.