Colorado man who unwittingly split a $4.8M jackpot with scammer is fighting the Colorado Lottery

Apr 15, 2019, 10:14 am (34 comments)

Colorado Lottery

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

2012

2013

2014

2015

2016

2017

2018

2019

Denver Post

Comments

Bleudog101

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.

TheMeatman2005's avatarTheMeatman2005

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

noise-gate

Quote: Originally posted by Bleudog101 on Apr 15, 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.

I Agree!- The other thing is Duncan seems to think that since he's client was made aware of a lottery scheme, that the agents were inadvertently telling Amir to go after the money that did not end up with him. Duncan says his client isn't  " mad or frustrated" that's a lie, he is. Amir has been going at it for years, trying to get the rest of the money which he thinks is rightfully his.It's similar to going out to an expensive restaurant, leaving bones on your plate, and then complaining to the management that your stomach is upset, so you shouldn't pay for the meal. Amir is looking for a free meal, in other words * extra money.

BuyLow's avatarBuyLow

Quote: Originally posted by TheMeatman2005 on Apr 15, 2019

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.

TheMeatman2005's avatarTheMeatman2005

Quote: Originally posted by BuyLow on Apr 15, 2019

Lump sum amount is less than if paid as an annuity.

Ahhhh. Brain fart on my part. I forgot about that.

cottoneyedjoe's avatarcottoneyedjoe

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.

music*'s avatarmusic*

Criminals ruin life for the rest of us. 

 Equal Justice for all. 

noise-gate

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.....

Stack47

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?

ecnirP's avatarecnirP

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.Sulk Off

noise-gate

Quote: Originally posted by ecnirP on Apr 15, 2019

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.Sulk Off

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. 

hlamb's avatarhlamb

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.

grwurston's avatargrwurston

Quote: Originally posted by hlamb on Apr 15, 2019

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.

I Agree!  If not Amir, it could have just as easily been someone else. Plus we don't know if Amir bought his ticket before or after Tipton rigged the computer. Not only that, but there is always the chance that if Amir had more than one ticket he could have won even if Tipton had not rigged the drawing.

noise-gate

Quote: Originally posted by hlamb on Apr 15, 2019

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.Big Smile

grwurston's avatargrwurston

Quote: Originally posted by noise-gate on Apr 15, 2019

Ok, you win. It was a shot in the dark. First mistake of the year, not bad.Big Smile

We'll let it slide...  Green laugh

noise-gate

You have no idea how much that means to me, I am so relieved.Cheers

grwurston's avatargrwurston

Quote: Originally posted by noise-gate on Apr 15, 2019

You have no idea how much that means to me, I am so relieved.Cheers

Your perfect record remains intact.  Cheers To you. 

noise-gate

Quote: Originally posted by grwurston on Apr 15, 2019

Your perfect record remains intact.  Cheers To you. 

No G, when l am wrong, l am wrong. I have been told l do not apologize enough, so l will remove my BP vest and take the hit, shrapnel & all.

grwurston's avatargrwurston

Quote: Originally posted by noise-gate on Apr 15, 2019

No G, when l am wrong, l am wrong. I have been told l do not apologize enough, so l will remove my BP vest and take the hit, shrapnel & all.

If you insist...  Hang on while we pour some water on the noodles.

ecnirP's avatarecnirP

Quote: Originally posted by hlamb on Apr 15, 2019

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.

Get your facts right before questioning someone's opinion.

To quote the very good story here on Lottery Post by the NY Times Magazine:

"Tipton's extra lines of code first checked to see if the coming lottery drawing fulfilled Tipton's narrow circumstances. It had to be on a Wednesday or a Saturday evening, and one of three dates in a nonleap year: the 147th day of the year (May 27), the 327th day (Nov. 23) or the 363rd day (Dec. 29). Investigators noticed those dates generally fell around holidays — Memorial Day, Thanksgiving and Christmas — when Tipton was often on vacation. If those criteria were satisfied, the random-number generator was diverted to a different track. Instead, the algorithm would use a predetermined seed number that restricted the pool of potential winning numbers to a much smaller, predictable set of numbers."

Tipton did not learn what possible group of numbers would come up in a possible time frame. Tipton coded the machines to disable the random number generator in certain scenarios that he inserted into the system. That's what led to the winning numbers being generated in this case. Had the random number generator not been compromised, Massihzadeh's quick pick numbers would not have been the ones generated on that day, depriving him of his share of the jackpot. Thus my opinion that the state has an interesting position.

noise-gate

Quote: Originally posted by grwurston on Apr 15, 2019

If you insist...  Hang on while we pour some water on the noodles.

 Hold off on the noodles G. It seems Prince *in reverse, made a case for both him & myself being right on this call.Tipton put money in Amir’s pocket. Simply put, without Eddie’s intervention, Amir would not have won. Let me take a brief moment, and look down on creation.

KY Floyd's avatarKY Floyd

"without Eddie’s intervention, Amir would not have won"

Well, he probably wouldn't have won, but there's a very small chance that he would have won anyway.

There are two things that are sure. One is that every lottery contract with winners who won prizes that were affected by Tipton's scheme is a contract where there was a mutual mistake as to the facts. When a mutual mistake is about a material fact the contract is potentially voidable, and I'd say that a mistaken belief that the 2/3 of a lottery prize you weren't being offered was won fair and square by the other two "winners" is a material fact. In that case the contract shouldn't prevent the guy from being awarded the full prize, but the fact that he almost certainly wouldn't have won without Tipton's illegal rigging should disqualify him from the other 2/3 of the prize.

The other thing that's sure is that the other 2/3 of that prize should have gone to somebody other than the people it did go to. The same is true for every other prize awarded to people who played the winning numbers because they were part of Tipton's conspiracy. All told there's a very big chunk of change that should have gone to legitimate winners but didn't. The lottery shouldn't give any money to Massihzadeh, but the various lotteries should be figuring out a way to pay that money out to players selected at random.

IMHO there's some major irony in the plans of the Iowa lottery to give away the $1 million prize that wasn't claimed by a (presumably) legitimate winner while they're working diligently to not give away the money that was "won" by Tipton's ticket but not paid out.

noise-gate

Quote: Originally posted by KY Floyd on Apr 18, 2019

"without Eddie’s intervention, Amir would not have won"

Well, he probably wouldn't have won, but there's a very small chance that he would have won anyway.

There are two things that are sure. One is that every lottery contract with winners who won prizes that were affected by Tipton's scheme is a contract where there was a mutual mistake as to the facts. When a mutual mistake is about a material fact the contract is potentially voidable, and I'd say that a mistaken belief that the 2/3 of a lottery prize you weren't being offered was won fair and square by the other two "winners" is a material fact. In that case the contract shouldn't prevent the guy from being awarded the full prize, but the fact that he almost certainly wouldn't have won without Tipton's illegal rigging should disqualify him from the other 2/3 of the prize.

The other thing that's sure is that the other 2/3 of that prize should have gone to somebody other than the people it did go to. The same is true for every other prize awarded to people who played the winning numbers because they were part of Tipton's conspiracy. All told there's a very big chunk of change that should have gone to legitimate winners but didn't. The lottery shouldn't give any money to Massihzadeh, but the various lotteries should be figuring out a way to pay that money out to players selected at random.

IMHO there's some major irony in the plans of the Iowa lottery to give away the $1 million prize that wasn't claimed by a (presumably) legitimate winner while they're working diligently to not give away the money that was "won" by Tipton's ticket but not paid out.

I Agree!..Which is one of the reasons I do not support Amir‘s claim. It reminds me of a Youtube piece on the behind the scenes of a MM or PB drawings in Florida, where this woman says “ every ticket has the same chance as the next.” That is true, but not in this particular case, why? Because Tipton threw “ chance” out of the window the moment he set he’s shenanigans in motion.

KKLK$DAY7

I Agree! quickest way to double your money. hILARIOUS!!

KKLK$DAY7

Hm I think Amir should look at things this way. If the other two ticket holders tickets were destroyed by either their pet roaches or their crazy life styles, the lottery commission theory would be, they are not obligated to make the entire pay out to the sole ticket holder. Hope Mr. Amir is not paying his attorney.

KKLK$DAY7

Lurking

Stack47

I always thought not paying restitution was part of the plea bargain. Possibly to prevent paying off claims like this one.

gy65

Plea Bargain pdf Link

Prison Offender Information Link

noise-gate

Quote: Originally posted by Stack47 on Apr 29, 2019

I always thought not paying restitution was part of the plea bargain. Possibly to prevent paying off claims like this one.

l seriously doubt Tipton ever intended to pay restitution. I mean his whole aim was to have money flowing into his bank account, not going out.

I noticed that he signed the restitution “ agreement “ followed by his attorney’s & then the Attorney General of certain States. Tipton probably figures, peace treaties are signed all the time & before the ink is dry, the bombing commences. People sign child support agreement, then they go missing, to Tipton signing a piece of paper is no big deal.

Stack47

Quote: Originally posted by gy65 on Apr 29, 2019

Plea Bargain pdf Link

Prison Offender Information Link

Thanks!

Tucker Black's avatarTucker Black

Amir was neither benefited nor disbenefited by Tipton. Amir bought a QP ticket. Tipton's cheating did not make QP terminals pick one of the sets of numbers on his "lucky sheet" that he sent to his friends. A QP ticket has exactly the same chance of winning any drawing whether Tipton's code was running or not.

After the drawing is over, it's easy to look back and say "aha you only won because of Tipton" but we don't make bets on past drawings. We only make bets on future drawings. Even if you know that the next drawing will be fixed, a QP ticket still has the same chance of winning.

Amir deserves the full amount and CO needs to get their restitution. Then everyone is made whole. Amir should not be punished because Tipton is still cheating by not paying restitution.

KY Floyd's avatarKY Floyd

"We only make bets on future drawings."

Hello, McFly? Betting on a future drawing is exactly what Amir did when he bought the QP that happened to have the numbers that won as a result of Tipton rigging the game. Amir bet on that future drawing by buying a ticket that had an extremely small chance of winning and had the game been random, as it was supposed to be, he almost certainly would have lost. Instead of getting a random result Tipton's manipulation eliminated the vast majority of possibilities and rather than having a small, but fair chance at winning Amir was given a far better and unfair chance at winning. The chances that he benefited from Tipton's scheme is well over 99.9%. At the same time a lot of people who bet on that future drawing had thier small chance of winning rduiced to zero, but I'm guessing you don't think any of them deserve the full amount of the prize.

"Amir should not be punished because Tipton is still cheating by not paying restitution."

Tipton's failure to pay restitution has nothing to do with it. The question is whether or not Amir won less than he should have because of Tipton's scheme, and as in any other civil lawsuit Amir needs the preponderance of the evidence to be in his favor in order to win. That means he needs to prove that the most likely outcome if Tipton hadn't rigged the drawing is that Amir would have won anyway, but the evidence is overwhelmingly against him.

ckrakowski

This makes me ashamed of my home state.

 

Every judge that rules for the lottery needs to be investaged and looked at to see if they got any "donations" from the lottery.

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