White-Collar Crime

Former lottery security chief and his brother, an ex-judge, charged with rigging payouts

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A computer whiz installed software on random number-generating equipment while working as security director of the Iowa-based Multi-State Lottery Association that enabled him to rig games and direct a number of jackpots to his friends, authorities say.

Already convicted last year of rigging a $16.5 million Iowa jackpot, Eddie Tipton is currently being prosecuted on charges of engaging in similar conduct in multiple other states. Meanwhile, his younger brother, Tommy Tipton, 51, a former justice of the peace and reserve police officer in Flatonia, Texas, was charged Wednesday in with playing a role in unlawfully obtained Colorado and Oklahoma jackpots and released on $25,000 bond.

Prosecutors said in a complaint that Tommy Tipton came to their attention in 2006, when a tipster claimed he had $500,000 in cash in consecutively numbered bills, the Associated Press reports.

Tommy Tipton said he had a friend claim the $568,990 he won in the Colorado Lotto in November 2005, in exchange for a share of the payout, because he didn’t want his wife to know about it, the Gazette reports. Authorities didn’t know then that Tommy Tipton’s brother worked for the lottery association and had built the computer used in Colorado to pick the winning numbers.

Tommy Tipton’s lawyer, Randy Schaffer, declined to comment specifically on the case but pointed to his client’s character and the fact that he turned himself in rather than fighting extradition, the AP reports.

“This is a guy who, until a few months ago, was a judge,” Schaffer said. “He’s going to hopefully … be professional and responsible in his dealings.”

Eddie Tipton was convicted last year in the Iowa case, based on circumstantial evidence and a fuzzy surveillance video of the man buying the winning ticket, which some witnesses identified as him, the Associated Press reported at the time.

“There’s just absolutely no evidence whatsoever that he did anything to alter the proper operations of the computers that were used to pick those numbers, absolutely no evidence. It’s just all speculation,” said his lawyer, Dean Stowers, in December. according to another Associated Press article.

However, investigators have since recovered a random number generator used in Wisconsin, documents filed in Tommy Tipton’s case say. Code installed after the machine was audited by a security firm told it to use an algorithm known by Eddie Tipton on three days out of the year, an affidavit by an investigator says.

The alleged result was a $2 million Megabucks payout in 2008 to a friend of Eddie Tipton, who has also been charged, the AP article recounts.

With the recovered number generator in hand, investigators recreated draws and obtained “the very same ‘winning numbers’ from the program that was supposed to produce random numbers,” wrote agent Don Smith of the Iowa Division of Criminal Investigation in an affidavit in the Polk County, Iowa, case.

Six big lottery payouts linked to Eddie Tipton all were drawn either Nov. 23 or Dec. 29, over a six-year period from 2005 to 2011, authorities say. The Iowa lottery association for which he worked helps run lotteries in three dozen states.

Iowa authorities started asking questions when a New York lawyer sought to claim the $16.5 million winning ticket in 2012 but refused to identify the purchaser, the AP reports. In the end, the jackpot was never claimed.

To try to identify the actual purchaser, a surveillance photo of the hooded man buying the winning ticket at a gas station near the lottery association’s headquarters in December 2010 was publicized. Stunned colleagues said he looked and sounded like Tipton.

He was sentenced to 10 years last year but is free on bond as he appeals.

Related coverage:

ABAJournal.com: “Suit claims rigged lottery game reduced subsequent winner’s jackpot”

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