Iowa Lottery Fraudster Faces More Charges

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(CN) – Wisconsin’s attorney general brought charges against convicted lottery fraudster Eddie Tipton and his friend, accusing them of rigging the state’s Megabucks lottery to win a $783,000 jackpot.

Tipton used to work for the Multi-State Lottery Association as the information security director responsible for the software that generates random numbers for lotteries in multiple states.

As an employee of the association, Tipton was barred from playing the lottery. But according to a complaint filed Thursday in Dane County Circuit Court, Tipton planted a modified software code in the random number generator that produced a predictable set of winning numbers when certain conditions were met.

He allegedly gave these numbers to his friend Robert Rhodes, who purchased a winning Megabucks ticket on Dec. 29, 2007, and the two split the jackpot of $783,257.72.

Tipton approached Rhodes again in 2010 about exploiting the Wisconsin lottery, and Rhodes said he didn’t want to “tempt[] fate” again, according to the criminal complaint brought by Wisconsin Attorney General Brad Schimel.

Rhodes eventually agreed to the scheme, but backed out at the last minute and did not play the winning numbers, the complaint states.

Tipton then pressured Rhodes to redeem the winning ticket Tipton had bought for the Iowa Hot Lotto game, Schimel says. The ticket was the only winner of a $16.5 million jackpot.

Tipton allegedly said he did not want his brother Tommy Tipton to cash the ticket because Tommy had already won a $569,000 Colorado jackpot and had been interviewed by the FBI.

Rhodes tried to find a third party to redeem the Iowa ticket, but two men were turned away because they did not look like the man shown in a surveillance video of the purchase.

Four years later, the state released the video to the public in hopes of identifying the purchaser. Another lottery association employee recognized Tipton as the buyer.

Iowa charged Tipton with two felonies: passing or attempting to redeem a lottery ticket with the specific intent to defraud, and tampering with lottery equipment with the intent to influence winnings.

Surveillance footage presented at trial showed Tipton entering the “draw room,” which housed the two number-generating computers, one month before the winning numbers were drawn, allegedly to update the dates on the computers. The next month, both computers were wiped, according to court records.

A jury convicted Tipton on both charges in early 2015, but an appeals court reversed the conviction on the charge of attempting to redeem the lottery ticket as barred by the three-year statute of limitations.

The $16 million jackpot has never been redeemed.­­­

Rhodes is expected to enter a guilty plea on the Iowa charges next month.

In Wisconsin, both men face charges of racketeering and theft by fraud. Tipton is also charged with four counts of computer crime. The charges are punishable by a prison term of three to 15 years, and a fine of $10,000 to $50,000.

Both men will make their initial appearance in the Wisconsin case against them in February 2017.