Lottery Fraudster Eddie Tipton Sentenced to 25 Years in Prison

Posted on: August 22, 2017, 06:00h. 

Last updated on: August 22, 2017, 08:21h.

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Expertise: Commercial Gaming.

Eddie Tipton, the man who fixed the lottery six times in several states, was sentenced to “no more than” 25 years prison by an Iowa judge on Tuesday. He will also pay $2.2 million in restitution to state lotteries.

Lottery fraudster Eddie Tipton gets 25 years
Eddie Tipton, former Multi-State Lottery head of security, was sentenced to a maximum 25 years in prison and ordered to repay $3 million, although his lawyers have argued he only made around $350,000 from the scheme. (Image: Rodney White/AP)

The former head of security for the Multi-State Lottery (MUSL) pleaded guilty to theft and computer crime after accepting the $2.2 million plea bargain deal in June. He had previously protested his innocence since his arrest in January 2015.

As security chief, Tipton was part of a team, based at MUSL headquarters in Iowa, that built the random number generators (RNGs) designed to ensure in the draws were fair.

But he was able to install a self-destructing hack that enabled him to rig certain draws. He also tampered with surveillance cameras to ensure his secret installation went unnoticed.

Jackpots Rigged

Investigators analyzing the RNGs in the wake of Tipton’s arrest found that they contained two extra bits of deep-lying coding that instructed them to generate Tipton’s numbers on just three days of the year.

All six jackpots claimed by Tipton or his associates occurred either on 23 November or 29 December between 2005 and 2011. Tipton confessed to fixing games in Iowa, Colorado, Wisconsin, Kansas and Oklahoma with the help of his brother, former Texas judge Tommy Tipton, and Texas-based businessman Robert Rhodes.

Tommy Tipton is serving a 75-day jail sentence after pleading guilty in June to conspiracy to commit theft by deception. Rhodes has pleaded guilty to a computer crime and will be sentenced Friday.

The scheme unravelled when lottery officials became suspicious about various aborted attempts to anonymously claim a $16.5 million Hot Lotto ticket that had been purchased at a Des Moines convenience store in 2010.

All claimants had been stool pigeons organized by Rhodes at the behest of Tipton.

Caught on Camera

Tipton’s colleagues at MUSL recognized him as the man buying the ticket after video surveillance footage from the store was released by police.

“It is indeed unfortunate that you did not use that intelligence to prosper by legal means,” said District Court Judge Brad McCall during sentencing. “Instead you chose an illegal path.”

“I certainly regret,” Tipton had previously told the court. “It’s difficult even saying that. With all the people I know behind me that I hurt and I regret it. I’m sorry.”

It’s uncertain how many years Tipton will actually serve. While he has been sentenced to a maximum of 25, he could be paroled within three or four. His attorneys had argued that, despite being the brains behind the operation, he had only profited by around $350,000 out of a haul of several million. Some of his associates walked away with more money, they said.