Journalist faces subpoena in lawsuit over lottery scandal

Aug 28, 2019, 9:50 am (2 comments)

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An Iowa journalist who wrote a book about the lottery insider who rigged jackpots in several states has been subpoenaed to turn over notes related to his reporting.

Perry Beeman received the subpoena last week from lawyers for Larry Dawson, an Iowa jackpot winner who contends that the rigging reduced his prize by millions of dollars.

Beeman co-wrote the recent book "The $80 billion Gamble" with former Iowa Lottery CEO Terry Rich. It tells the story of how now-imprisoned lottery security contractor Eddie Tipton altered number-picking programs on computers to win jackpots in Colorado, Wisconsin, Kansas and Oklahoma.

The subpoena orders Beeman to turn over his correspondence with Rich since January 2018, including notes related to four interviews they conducted last year.

It wasn't immediately clear whether Beeman intends to fight the request, which demands the records by Sept. 16.

The Iowa Supreme Court has ruled that reporter's sources, unpublished information and notes are privileged material and may be subject to disclosure only in limited circumstances.

Tipton had targeted Powerball, book says

Eddie Tipton unsuccessfully lobbied for his computer software to be used in Powerball drawings, an act that could have dramatically broadened the scope of his crimes, the former head of the Iowa Lottery wrote in "The $80 Billion Gamble".

The book, which was release earlier this summer, provides insider details about how Eddie Tipton and his accomplices flubbed their long-running national scam through seemingly inconsequential lies and brazen confidence, using a system that critics contend continues to lack proper oversight.

"One of the reasons that we put this book together was to document what happened because somebody is always trying to beat the system," said Terry Rich, the co-author and former Iowa Lottery director, who retired in December.

Tipton was a former security chief at the Multi-State Lottery Association in Urbandale, an umbrella gaming organization that is owned and operated by 36-member lotteries, including the Iowa Lottery. In 2005, he hijacked the organization's system by adding a software code that allowed him to predict the winning numbers of what should have been random computer drawings.

The corrupt software was replicated to games in as many as 17 states, according to transcripts of Tipton's confession to prosecutors that the Register obtained last year. Tipton also pushed the association to implement his software on the multi-state Powerball game — which has produced billion-dollar jackpots — but the association's board rejected the idea, Rich says in the book.

The scam began to fall apart in 2011 because of an Iowa law that requires lottery winners to publicly identify themselves. That law ultimately exposed the buyer of a winning $16.5 million 2010 jackpot at a Des Moines convenience store as Tipton.

Rich's book — co-written by longtime Iowa journalist and former Register reporter Perry Beeman — outlines how details about such things as hot dogs, a search for Bigfoot and Tipton's sloppy attire unraveled the scam.

Eddie Tipton and his brother Tommy pleaded guilty in 2017 to felony crimes related to the rigging scheme and agreed to repay $2.3 million in restitution and court fees. Eddie Tipton was sentenced to up to 25 years in prison. Tommy Tipton, a former Texas magistrate, was sentenced to 75 days in jail.

The Tipton brothers have so far repaid less than $1,300 despite owning nearly $2 million worth of property in Texas, a Register investigation published in April showed. Iowa never paid the $16.5 million winning ticket and is not one of the states that is owed restitution.

Laws or policies in some other states that allow lottery winners to claim prizes anonymously or without publicly identifying themselves — like one vetoed last year by New York Gov. Andrew Cuomo — would have almost certainly meant that Tipton wouldn't have been apprehended, Rich said.

"What this hopefully will do is to encourage customers and players of lotteries across America to not be afraid to call and say, 'Hey, this didn't feel right when I bought this ticket,' and for lotteries to ask the key questions," Rich said.

Officials of groups like Stop Predatory Gambling, based in Washington, D.C., contend lotteries in the United States are largely self-regulated, without the oversight that is required of other gaming facilities such as casinos or horse tracks.

Gary Dickey, a Des Moines attorney, represents plaintiffs in an ongoing class-action lawsuit against the Multi-State Lottery Association in connection to Eddie Tipton's crimes. He says Tipton's crimes should be a wake-up call triggering national lottery regulatory reform.

"To give credit where credit is due, the Iowa Lottery's practice of investigating winners is the only reason Eddie Tipton got caught," Dickey said in response to the new book.

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.










AP, Des Moines Register, Lottery Post Staff



I think Lucky Larry’s attorney is getting desperate. Dawson wanted nothing to do with a settlement dealing with Tipton, and it’s possible that the boat has sailed. It’s as l said before “ leave the dinner table when you full, instead of sticking around for dessert.” 

music*'s avatarmusic*

I believe that anonymous States require an in person interview with the actual winner.  This requires trust between the players and the Lottery Officials. Also the winners need to trust that their identity will not be released.

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