Sep 15

Eddie Tipton Sentenced to 10 Years for Hot Lotto Fraud

Eddie Tipton, the former Multi-State Lottery Association (MUSL) worker who was convicted of trying to rig the Hot Lotto game in 2010, was this week sentenced to ten years in prison. He was found guilty in July on two counts of fraud, following accusations that he tampered with lottery equipment to determine the winning numbers, before buying a ticket and attempting to get acquaintances to collect the prize, even though his job with MUSL meant he wasn’t allowed to play the game.

He was said to have inserted a ‘rootkit’ program into the Hot Lotto draw computer to predetermine the numbers. The program then self-deleted so it could avoid detection, with Tipton covering his tracks by tampering with security cameras.

Iowa resident Tipton’s job at MUSL, which also administers the huge Powerball and Mega Millions lotteries, was to ensure that no one could cheat the game, leading to Judge Jeffrey Farrell referring to his crime as “about as large an invasion of trust as I can possibly imagine”. In passing sentencing, the judge explained that this had been one of the major factors in him handing down the maximum term possible.

The Hot Lotto case captured the imagination of the nation after Crawford Shaw, a New York attorney, attempted to collect the $14.3 million prize with just hours to go before it expired in December 2011. Shaw claimed to be acting on behalf of an investment company based in Belize, but withdrew his claim when Iowa Lottery officials demanded he name the ticket’s true owner.

In late 2014, police released security camera footage of the ticket being purchased at a Des Moines Quick Trip store and put out an appeal to trace the man depicted. A number of Tipton’s co-workers confirmed that it was him, with the license plate of a car in the parking lot at the same time also linked to him. Tipton’s lawyer, Dean Stowers, had suggested in an interview with The Daily Beast in July that the person in the video could have been a “skinny man in a fat suit” attempting to frame his client.

Stowers says he and his client will appeal the sentence, claiming Tipton had always been a productive member of the community and that no one had suffered any financial loss from the scheme.

by Mike Redfern
Updated March 30th, 2016

Jul 15

Hot Lotto Fraud Trial Hears Witness Testimonies

The trial of a former Multi-State Lottery Association (MUSL) employee accused of rigging a Hot Lotto draw has heard from witnesses on both sides during the first few days in court. Eddie Raymond Tipton is being tried on two counts of fraud, having been arrested in January on suspicion of buying a Hot Lotto ticket and later claiming a prize. As the security director for the MUSL at the time of the draw in question in December 2010, he was not not allowed to play the game or win any money.

The trial was originally scheduled to go ahead in April but was pushed back three months following a dramatic late twist, when prosecutors filed 500 pages of new material alleging that Tipton had tampered with a number generator in order to win $14.3 million. The prize went unclaimed until just before it was due to expire, when an attorney from New York came forward on behalf of a Belize-based corporation. The claim was later withdrawn and Iowa authorities launched an investigation.

Tipton has pleaded not guilty to all charges and his defence team maintains that he is not the man seen in surveillance footage showing the moment the ticket was purchased at a Des Moines convenience store. Denise Tipton, Eddie’s sister, testified this week to say the person in the video was not her brother, telling the court: “Several reasons just the general size for one, shoe size for another — never seen him wear a hooded jacket, never has he had a beard.” Defence lawyer Dean Stowers has argued that Tipton was clean-shaven at the time the ticket was bought, when he claims to have been visiting family in Texas.

Kathy Renaud, a Multi-State Lottery Association employee, had earlier told the prosecution that Tipton has facial hair ‘not most of the time, but 50 per cent probably’. She said she had not immediately recognised the man in the footage as Tipton but ‘when I heard the audio of the video, it was Eddie’. Renaud also testified to Tipton’s expertise of the computer equipment, with the prosecution claiming that he would have had the opportunity to install a rootkit to override the machine that generates the winning numbers.

Tipton’s case is reported to be the first of its kind when somebody has been accused of manipulating a lottery draw. Closing arguments are scheduled to begin on Friday morning and Tipton will later learn his fate as a long-running saga which has gripped America moves towards a conclusion.

by Mike Redfern
Updated July 17th, 2015

Jan 15

Authorities Arrest Iowa Lottery Employee over Mystery $14.3 Million Hot Lotto Win

Authorities investigating a $14.3 million Hot Lotto win from 2010 have arrested an Iowa Lottery employee who they say illegally played the game and asked others to claim the prize for him.

Norwalk, Iowa resident Eddie Raymond Tipton, 51 and a director of information security for the Multi-State Lottery Association (MUSL) which runs Hot Lotto and Powerball, has been charged with two felony counts of fraud after a former co-worker tipped off the authorities. It is claimed that Tipton is the man caught on video, with his head covered by a hood, buying the winning ticket from a convenience store, with the license plate of a vehicle in the parking lot at the time also linked to him.

Suspicions were raised in 2011 when the prize was claimed close to the cut-off date by Crawford Shaw, a New York attorney. Although the ticket was valid, MUSL refused to pay out after Shaw failed to name the person who had actually purchased the ticket. He claimed to be acting on behalf of a trust registered in the tax haven of Belize and later withdrew his claim, although Shaw is said to have been helping authorities with their enquiries.

With the only claim on the prize withdrawn, the $14.3 million prize expired and was split between the states which participate in Hot Lotto, with the Iowa Lottery using its cut for a special promotion in 2012.

It is claimed that Tipton contacted two men in Texas, one of whom he had attended school with, who in turn reached out to Shaw and a Canadian man who then created the Belize trust. The identity of the ticket purchaser remained a mystery, leading to a police appeal in October 2014 which included the release of the convenience store tape that led to the tip-off. Voice analysis was undertaken by agents from the Iowa Division of Criminal Investigation, along with further investigations which led to Tipton’s arrest.

Tipton is currently being held at the Polk County Jail on a cash-only bond of $10,000.

by Mike Redfern
Updated January 16th, 2015

Dec 14

Texas Lottery Halts Sales of Monopoly Millionaires’ Club

The Texas Lottery Commission has decided to stop offering tickets for the interstate game Monopoly Millionaires’ Club (MMC) after citing concerns about sales projections. Players have not been purchasing tickets for the game at a level that could cover the cost of paying out prizes to Texas residents.

Texas, along with 22 other states, launched MMC on Friday October 19th of this year, with the first drawing held on Friday October 24th. The game is operated by the Multi-State Lottery Association (MUSL), which also administers popular games such as Powerball and Hot Lotto. Tickets cost $5 and the game offers players the chance to win a jackpot that could roll over up to $25 million in addition to several prizes of $1 million that are unlocked when a player wins the top prize. Unlike Powerball or Mega Millions, Monopoly Millionaires’ Club is designed to award smaller cash prizes to more players.

Executive Director of the Texas Lottery Commission Gary Grief stated in a press release that “unfortunately, players have not embraced the game as anticipated, and our options to change the game while it is being sold are limited in scope and challenging to implement.” The press release also states that sales for the game are down nationwide in the last two months.

Texas-based players of the game will be able to buy tickets for tonight’s Monopoly Millionaires’ Club drawing but sales will stop immediately afterwards. They will have 180 days from Friday December 12th 2014 to claim any prizes they may have won.

by Mike Redfern
Updated June 8th, 2015

Oct 14

Mystery buyer of $14.3 Million Hot Lotto Ticket at Center of Major Fraud Investigation

Investigators in Iowa are appealing for help as they search for a man who failed to claim a winning Hot Lotto ticket worth $14.3 million. While unclaimed lottery prizes do not normally fall under the responsibilities of state police, the ticket – purchased on December 23, 2010 – is at the center of a two-year fraud investigation.

Video footage shows a white man in a hooded top buying the winning ticket from a roadside convenience store near Interstate Highway 80. Although footage shows the man from two angles, his face is not clear, adding an extra element of mystery to the case.

Suspicions were first raised after a mysterious company called Hexham Investments Trust attempted to claim the prize just hours before the 12-month deadline for claiming the fortune was set to expire. The individuals involved in the trust refused to disclose their identities and the claim was refused by Lottery officials. In a final attempt to claim the prize, New York attorney Crawford Shaw – who had acted on behalf of Hexham Investments – asked if he could claim the cash and turn it over to the state for charity purposes.

Once again Lottery Officials refused the claim and the prize money was returned to participating Hot Lotto states. However, the 11th-hour claims had attracted the attention of the Iowa Division of Criminal Investigation (IDCI) who have been investigating the incident as a possible fraud case since 2011.

IDCI assistant director Dave Jobes said, “A fraud was perpetrated when someone attempted to redeem the ticket fraudulently.”

“The other reason to pursue it is we don’t know if something happened to the original ticket purchaser.”

There are suggestions that the purchaser could have been a participant in the fraud, but it is believed he is more likely to be a victim of the crime. It is not known whether he is a resident of Iowa or was passing through at the time he bought the winning ticket and information regarding his identity remains threadbare.

by Mike Redfern
Updated October 10th, 2014