Iowa Lottery Blocks Lottery Scammer from Cashing on Crimes

The Iowa Lottery has moved to block the biggest lottery scammer in US lottery history to date from cashing on his crimes by issuing a book or selling movie rights for his story.

No Book and Movie Rights

Eddie Tipton, the mastermind behind the biggest inside lottery fraud, was paroled from prison last month after serving four-and-a-half years of his up to 25-year sentence for rigging the Hot Lotto numbers on multiple occasions across multiple states and the Iowa Lottery requested the Iowa Parole Board to prohibit him from seeking book or movie rights for his story.

“We believe it’s just sound public policy not to have criminals profit from their crimes.”

Matt Strawn, CEO, Iowa Lottery

Tipton, who was sentenced in 2017 after pleading guilty to charges of theft by fraud and computer crime, should not participate in any paid speaking engagements or any other form that will allow him to profit from his crimes either.

Strawn said Tipton dented “the very confidence that Iowa Lottery players have to have” that they stand a fair winning chance when buying a lottery ticket. But the story of how the former head of security at the Multi-State Lottery Association (MUSL) rigged the results also has an element of failure on behalf of the association’s recruitment procedures which allowed a man with a criminal record to assume the role of top information security personnel.

Tampering the RNG Computers

Tipton’s series of lottery frauds started back in 2005 when he, as head of security of the association owned and operated by 35 state lotteries, was granted access to the random number generating computers used in the drawings, and after tampering with the security cameras, installed a self-deleting malware that allowed him to rig the numbers on certain dates and draws.

In November 2005, a drawing for a $4.8 million jackpot in Colorado was Tipton’s first stab in which he also involved his brother Tommy Tipton, who happened to be in the state and had to play the set of numbers.

Eddie’s brother also involved two other individuals, a defense lawyer from Texas who he had consulted whether it was legal to play the numbers, and another friend of his to collect the winnings. The jackpot was split three ways: the one with an easy-pick ticket was ruled legitimate but the other two winners were Tommy’s friend and an attorney from Texas, who both created a limited liability company (LLC) to collect their winnings.

The next episode of the scam involved a former colleague and close friend of Tipton, Robert Rhodes, and they both created another LLC to claim $783,000 in 2007, but the fraud started to unravel on Tipton’s third attempt, the $16.5 million jackpot in 2010 in Iowa.

Three Times Not a Charm

After an attempt by a local attorney to claim the winning hours before the deadline failed as Iowa state law forbids anonymous lottery claims, the Iowa Division of Criminal Investigation was involved in the case, but in the next three years, investigators failed to identify from the CCTV footage the man who had bought the ticket and decided to release the video, which in turn allowed a former colleague of Tipton to recognize his voice.

Charged with 2 counts of felony fraud, for fraudulently passing or redeeming a lottery ticket and for influencing the lottery prize through fraud, deception, or tampering with official lottery equipment, in January 2015, Tipton was found guilty six months later but remained free on bond during his pending appeal.

Following testimony from his close friend Rhodes in early 2017, Tipton pled guilty to the charges of theft by fraud and computer crime as part of a deal that also saw him plead guilty for the ongoing criminal conduct in Iowa and the jury issued a sentence of up to 25 years in jail.

His brother received a 75 days prison sentence for his role, while the brothers agreed to pay a total of $2,222,863.60 in restitution.

Following the end of the saga, the notorious Hot Lotto saw its last drawing in October 2017 and was replaced by another lotto game named Lotto America.