Iowa Lottery Statement Following Eddie Tipton Sentencing In Jackpot Investigation Case
CLIVE, Iowa – Iowa Lottery CEO Terry Rich released the following statement Tuesday following Eddie Tipton's sentencing in the long-running lottery jackpot investigation case:
"We appreciate the work of the judge and respect the court's decision. This moment has been years coming, and provides closure and certainty after all this time.
Every organization will face tests throughout its history, and this case certainly was one for our lottery. It's disconcerting that someone who worked at a vendor organization within the lottery industry chose to betray the trust placed in him for his own personal gain. We're glad that the judicial system worked and that this case has been solved.
This case is an important reminder to lotteries everywhere to keep monitoring and making improvements to stay ahead of those who would try to beat the system. It was the security procedures at our lottery that caught this fraud attempt and prevented a multi-million-dollar jackpot from being paid out.
We're proud of the work done in this case and thank the Iowa Attorney General's Office and the Iowa Division of Criminal Investigation for their dedication and professionalism in achieving this outcome.
Some might say this case represented our lottery's worst day, but in retrospect, I also believe it was our best day in terms of the information we learned and the enhanced procedures and processes we have in place today to protect against the vulnerabilities identified. We thank our players for their understanding through this long-running case as the process ensured that justice was served.
I have absolute confidence in the integrity of Iowa Lottery's games today and know that they offer everyone the same fair shot at winning."
Additional History and Background
In December 2010, a man bought a Hot Lotto ticket at a convenience store on Des Moines' north side. That ticket went on to win the multi-million-dollar jackpot on the line in the Hot Lotto drawing on Dec. 29, 2010. For nearly a year, the prize went unclaimed.
Then, with less than two hours to go before the prize would have expired on Dec. 29, 2011, the winning ticket was presented by lawyers on behalf of a New York investment trust that had been established to benefit a corporation in the country of Belize. Neither the two lawyers who presented the ticket nor anyone associated with Hexham Investments Trust of Bedford, N.Y., would provide the basic details necessary to verify that the ticket had been legally purchased, legally possessed and legally presented. Those involved said they could not identify the jackpot winner or the man who purchased the winning ticket.
That standard information is routinely requested from jackpot winners in Iowa as part of the lottery's security processes to comply with both state law and lottery game rules. Such details are usually received within minutes of the time a winning ticket is presented.
On Jan. 26, 2012, Crawford Shaw, a New York attorney who identified himself as the trustee of Hexham Investments Trust, withdrew the claim to the jackpot. That same day, the Iowa Attorney General's Office and Iowa Division of Criminal Investigation opened a criminal investigation into the matter at the request of the Iowa Lottery.
In 2017, three men with Texas ties all pleaded guilty to felony charges in the case, admitting that they conspired to illegally claim lottery winnings by utilizing malicious computer code to rig lottery drawings in five states.
Eddie Tipton, the man at the center of the investigation, had worked for more than 11 years in information-technology at the Multi-State Lottery Association (MUSL), an Urbandale-based lottery vendor organization. Prosecutors said that he installed malicious computer code that allowed him to predict winning numbers in lottery drawings on three days of the year.
For his central role in the case, Eddie Tipton pleaded guilty to three felony charges in Iowa and Wisconsin of ongoing criminal conduct, theft by fraud and computer crime. Prosecutors said that Tipton conspired with friends and family in claiming lottery prizes in Colorado, Kansas, Oklahoma and Wisconsin and attempting to claim the lottery jackpot in Iowa, which ultimately was not paid.
Tipton's younger brother, Tommy Tipton of Flatonia, Texas, pleaded guilty in the case to a felony and a misdemeanor charge of conspiracy to commit theft; and Tipton's long-time friend, Robert Rhodes of Sugar Land, Texas, pleaded guilty to a felony charge of being party to a computer crime.
A plea agreement calls for Rhodes to serve six months' home confinement in Texas and pay $409,000 in restitution to the state of Wisconsin. Tommy Tipton was sentenced in June to 75 days in jail. The Tipton brothers also agreed to pay $2.2 million in restitution to the Colorado, Kansas, Oklahoma and Wisconsin lotteries.
A timeline of events in the long-running lottery jackpot investigation can be found here
A map showing the prizes involved in the lottery jackpot investigation can be found here
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