Former Lottery Employee Found Guilty of Rigging the System For His Benefit

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A former high level security official at a non-profit lottery association was recently convicted of rigging the “Hot Lotto” system so that he could win a $14 million jackpot, and attempting to cash it in without revealing his identity.

The Associated Press reports that Eddie Tipton, 52, was found guilty by a Des Moines jury on July 20th after five hours of deliberation. Tipton never actually received any of the money he was accused of swindling, but he was nonetheless convicted on two counts of fraud.

Before being fired and arrested last January, Tipton had been working for the Multi-State Lottery Association (MSLA) since 2003 in Des Moines. Two years ago, he was promoted to Information Security Director. THe MSLA is composed of 37 lotteries, most of which are state-run, and is tasked with overseeing number-pickings for several lottery games.

As an employee, Tipton was privy to the numbers ahead of time. However, also as an employee, he was not allowed to play the lottery in Iowa.

According to prosecutors, Tipton used his position to secretly insert winning numbers through a computer program in 2010. He then bought a winning ticket and gave it to a friend of his in Texas and asked him to cash it in for him. This man contacted attorneys in Texas and Canada in order to do so without revealing Tipton’s identify, despite the fact that Iowa law mandates lottery winners to be identified.

He then bought a winning ticket and gave it to a friend of his in Texas and asked him to cash it in for him.
He then bought a winning ticket and gave it to a friend of his in Texas and asked him to cash it in for him.

Prosecutors alleged that a surveillance video from a convenience store in Des Moines showed Tipton buying the winning ticket. However, the video quality was far from clear, casting doubt on whether the hooded man shown in the video was actually Tipton. Witnesses from both sides, including Tipton’s co-workers, friends, and family, gave contradicting testimonies on the identity of the hooded man. Some claimed it was Tipton while others said it wasn’t.

The defense attorney, Dean Stowers, was disappointed with the verdict and says he will appeal.

“What they did was prove a lot of facts that didn’t connect and the jury was allowed to speculate as to what those facts meant,” Stowers said.

Stowers’s client remains free on bond until his sentencing hearing on September 9th. He faces five years in prison on each count of fraud.

Iowa Assistant Attorney General Rob Sand, satisfied with the jury’s decision, said this case should warn other state lotteries about requiring their winners to be identified.

“I think this ought to be a wakeup call to other states in terms of maybe they should emulate the Iowa lottery’s requirements,” Sand said.

Even if Tipton had successfully cashed in the ticket, however, he still would’ve most likely received his payments as a structured settlement rather than a lump sum lottery payout. Selling structured settlements from lottery winnings or a court settlement is advantageous to claimants. About 92% of all claimants who sell their structured settlement claim they are satisfied with their decision.

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