ialottery blog

Settlement Reached In Lawsuit Stemming From Long-Running Jackpot Investigation Case

A settlement has been reached in a class-action lawsuit stemming from the long-running lottery jackpot investigation that ended with three men being sentenced after admitting that they cooperated to commit lottery fraud.

The Iowa Lottery was not a party to the lawsuit, but we view this as a moment to look back and take pride in our work along with that of other Iowa officials who led the investigation. That effort ultimately led us all to this point where there can be a settlement for affected players.

The $4.3 million settlement in the case of Culler et al vs. the Multi-State Lottery Association (MUSL) will provide refunds to those with nonwinning lottery tickets linked to the lottery fraud case that centered on Eddie Tipton, an Iowa man who worked for years in information-security at MUSL.

The settlement will allow refunds for the cost of tickets purchased in some lottery drawings between November 2005 and May 2013 in certain games sold around the country.

It’s our understanding that once the settlement reached by MUSL is approved by the court, a settlement website will be set up. That is the place where players who made purchases for the lottery drawings involved will be able to submit claims online or access claim forms that they can print out and submit by mail. We don’t have information yet about the settlement website, but we’ll share it when the details are provided to us.

Attorneys in the case say there will a mechanism for players who no longer have their tickets to file a claim.

The jackpot investigation case began with a lottery ticket purchased in December 2010 in Des Moines and culminated in 2017 with guilty pleas from three men who admitted they illegally claimed prizes by rigging lottery drawings in five states. Eddie Tipton, the man at the center of the investigation, worked at MUSL, an organization within the lottery industry, and installed malicious computer code that allowed him to predict winning numbers in some lottery drawings.

Tipton ultimately pleaded guilty to three felony charges in Iowa and Wisconsin and was sentenced in August 2017 to up to 25 years in prison. He had conspired with friends and family to claim lottery prizes in Colorado, Kansas, Oklahoma and Wisconsin. He also tried to claim a lottery jackpot in Iowa, but it was not paid after the Iowa Lottery’s security questions went unanswered. 

Tipton’s younger brother, Tommy Tipton, also pleaded guilty in the case, as did Tipton’s long-time friend, Robert Rhodes.

Burlington resident Dale Culler is among at least three people who filed lawsuits naming MUSL in connection with the rigged games. A Polk County District Court judge granted Culler's request to seek damages on behalf of other lottery players in a class-action suit.

Iowa Lottery Wins International Gaming-Compliance Award For Work In Investigation

The Iowa Lottery has won an international gaming-compliance award for its work in the long-running lottery jackpot investigation that uncovered fraud against U.S. lotteries and resulted in confessions and guilty pleas from three men.

Yesterday, GamblingCompliance named the Iowa Lottery its 2018 recipient for outstanding achievement in compliance. The organization’s annual awards that recognize excellence in 11 categories were presented in London. The lottery was one of five worldwide finalists for the gaming-compliance award.

We’re enormously proud of the work we put in and the perseverance investigators showed through the years in bringing the long-running case to a successful conclusion. We believed the case was a crucial opportunity for our lottery to pinpoint security enhancements and new technologies we could bring to our operations. I’m confident in the integrity of our games, and if anything, we’re even more aware today that we have to aggressively monitor and “trust but verify” in all areas of our operations if we’re going to stay ahead of those who would try to commit crimes.

GamblingCompliance is headquartered in London and has its U.S. hub in Washington, D.C. It provides independent legal, regulatory, and business intelligence to the global gambling industry.

The jackpot investigation case began with a lottery ticket purchased in December 2010 in Des Moines and culminated in 2017 with guilty pleas from three men who admitted they illegally claimed prizes by rigging lottery drawings in five states. Eddie Tipton, the man at the center of the investigation, installed malicious computer code that allowed him to predict winning numbers in some lottery drawings.

The Iowa Lottery noticed that something was amiss from the group’s earliest attempt to claim the jackpot won in Des Moines, and requested that the Iowa Division of Criminal Investigation open an investigation.

Tipton pleaded guilty to three felony charges in Iowa and Wisconsin and was sentenced in August 2017 to up to 25 years in prison. He had conspired with friends and family to claim lottery prizes in Colorado, Kansas, Oklahoma and Wisconsin and attempt to claim a lottery jackpot in Iowa, which ultimately was not paid.

Tipton’s younger brother, Tommy Tipton, also pleaded guilty in the case, as did Tipton’s long-time friend, Robert Rhodes.

About That N.H. Court Case That’s Got Everybody Talking …

It seems like people have been talking about the case everywhere this month, so I’m addressing it here on the blog as we head into the weekend. You’ve likely have heard by now about the New Hampshire woman who won the $559.7 million Powerball jackpot in the Jan. 6 drawing and then sued the state, saying that she wanted to remain anonymous when she claimed the prize.

A judge ruled this week that she can, indeed, remain anonymous. The prize was claimed in the name of the Good Karma Family 2018 Nominee Trust, with two lawyers representing the trust accepting a ceremonial check at a news conference in Concord.   
 
So we have been asked: And what does that mean for the prize-claim process here in Iowa?

From my understanding, the decision involved a specific exception in the New Hampshire open records law. There isn’t a similar exception in Iowa law, nor have prizes in Iowa been allowed to be claimed by trusts without the members of the trust also being identified.

Under Iowa law, lottery winners’ information is public. It is possible for a trust to claim a prize in Iowa, and that has happened through the years. But in addition to the name of the trust, the identities of the members of the trust also are released.

We firmly believe that transparency is important. Not everyone is on the up-and-up when it comes to dealing with large sums of money. And the requirement that winners’ information is public in Iowa was key to our efforts in the long-running lottery jackpot investigation that ended last year with guilty pleas to fraud charges from three men.

Iowa Lottery Named Finalist For International Gaming-Compliance Award

 

It’s a case we were involved in for more than seven years, so I hope you’ll bear with me as I share some good news to come out of that situation.

The Iowa Lottery is a finalist for an international gaming-compliance award for its work in the long-running lottery jackpot investigation that uncovered fraud against U.S. lotteries and resulted in guilty pleas from three men.
 
The Iowa Lottery is one of five finalists for the 2018 award for outstanding achievement in compliance from GamblingCompliance, which provides independent legal, regulatory, and business intelligence to the global gambling industry. GamblingCompliance presents annual awards to recognize excellence in 11 categories focused on regulatory compliance and responsible gaming. Its 2018 Global Regulatory Awards will be presented April 18 in London.

The jackpot investigation culminated last year with guilty pleas from three men who admitted they illegally claimed prizes by rigging lottery drawings in five states. Eddie Tipton, the man at the center of the investigation, installed malicious computer code that allowed him to predict winning numbers in some lottery drawings.
   
Tipton pleaded guilty to three felony charges in Iowa and Wisconsin and was sentenced in August to up to 25 years in prison. He had conspired with friends and family to claim lottery prizes in Colorado, Kansas, Oklahoma and Wisconsin and attempt to claim a lottery jackpot here in Iowa, which ultimately was not paid.  

Tipton’s younger brother, Tommy Tipton, also pleaded guilty in the case, as did Tipton’s long-time friend, Robert Rhodes.

Maximum Prison Sentence For Man At Center Of Jackpot Investigation

 

Eddie Tipton, the man at the center of the long-running lottery jackpot investigation, was sentenced today to up to 25 years in prison. He received the maximum sentence for the felony charge of ongoing criminal conduct to which he'd pleaded guilty here in Iowa.

While in court in Des Moines, Eddie Tipton said he regretted his actions in rigging lottery drawings, said he knew what he did was wrong, and that he was sorry for hurting so many people.

In handing down the maximum sentence, the judge said he was sending a strong message of deterrence. Tipton was taken into custody at the end of the sentencing hearing.   

Here at the Iowa Lottery, we appreciate the judge’s work and respect the court’s decision. This moment has been years in coming and provides certainty and closure after all this time.

Assistant Attorney General Rob Sand and Iowa Lottery CEO Terry Rich answered questions from the media after today’s hearing. Click on the video above for a front-row seat to their Q-and-A session.

Fort Dodge Man Charged In Theft Of Lottery Tickets

 

A Fort Dodge man faces three felony charges following an investigation by the Iowa Division of Criminal Investigation and the Iowa Lottery into scratch tickets that were missing from a Fort Dodge convenience store. Click here to see the full details today from the DCI.

LOTTERY STATEMENT FOLLOWING GUILTY PLEAS IN JACKPOT INVESTIGATION

Iowa Lottery CEO Terry Rich released the following statement today following Eddie Tipton and Tommy Tipton’s guilty pleas in Polk County District Court in the long-running lottery jackpot investigation:

“Today’s plea agreement is a crucial step in bringing to a close one of the biggest lottery mysteries in history. The details we’ve already learned through this long-running investigation have allowed us at the Iowa Lottery to develop security enhancements across our games and procedures, and we remain mindful of the need to continually review our operations to make improvements.

It was important to us to hear Eddie Tipton acknowledge in court today that he wrote malicious computer code, then used that code to predict winning numbers in lottery drawings and passed those numbers to others, including his younger brother, Tommy, multiple times in years past to fraudulently claim prizes. This information will be invaluable to the Iowa Lottery and the lottery industry as a whole to help us safeguard our games and protect our players.

We understand that this agreement is part of a package of plea deals that will resolve the pending criminal court proceedings relating to the attempt to claim the 2010 Hot Lotto jackpot prize in Iowa, as well as to the other lottery prizes paid in Wisconsin, Kansas, Oklahoma and Colorado.

We’re thankful for the extensive work in this nationwide lottery investigation by the Iowa Division of Criminal Investigation, the Iowa Attorney General’s Office and authorities from around the country.

We have said all along that the Iowa Lottery will follow the facts of this investigation wherever they may lead. I’m pleased to say we are one step closer to the end of that road today.

I continue to have confidence that Iowa Lottery games offered today are fair. Our lottery has strong layers of security in place to protect lottery players, lottery games and lottery prizes. And we will continue to make important necessary updates to maintain our safeguards.”

Lottery Statement Regarding Plea Agreement In Long-Running Jackpot Investigation

You may have heard that an agreement was reached today with Eddie Tipton and Tommy Tipton in the long-running jackpot investigation.

Iowa Lottery CEO Terry Rich released the following statement regarding today’s court proceedings:

“We’re pleased with the agreement that has been reached in the Tipton cases.  We understand that this agreement, if approved by a judge in Iowa, will resolve the pending criminal court proceedings relating to the attempt to claim the 2010 Hot Lotto jackpot prize in Iowa, as well as to the other lottery prizes paid in Wisconsin, Kansas, Oklahoma and Colorado.

We’re thankful for the extensive work in this nationwide lottery investigation by the Iowa Division of Criminal Investigation, the Iowa Attorney General’s Office and authorities from around the country. We’re also grateful for the support of former Governor Terry Branstad and Governor Kim Reynolds, for the priority that they have placed on protecting the integrity of the lottery system here in Iowa.

As these cases reach conclusion, we look forward to the process to help answer any remaining questions about exactly what occurred. This information will be valuable to the Iowa Lottery and the lottery industry as a whole to help us safeguard our games and protect our players.

We have said all along that the Iowa Lottery will follow the facts of this investigation wherever they may lead. I am pleased to say we are one step closer to the end of that road today.

I continue to have confidence that Iowa Lottery games offered today are fair. Our lottery has strong layers of security in place to protect lottery players, lottery games and lottery prizes. We will continue to enhance the layers of security to protect the integrity of our lottery games.”

More information about today’s court proceedings and the long-running jackpot investigation can be found on our website, here.

New Development In Jackpot Investigation

State investigators are asking for the public’s help in the long-running lottery jackpot investigation.

The Iowa Attorney General’s Office has requested subpoenas for records relating to two Texas attorneys, and the Iowa Division of Criminal Investigation is seeking lottery-related information about those same two men.

Click here to see the full announcement from the Iowa Department of Public Safety.

 

3 Arrests In NW Iowa Prize-Claim Investigation

Three people have been arrested in northwest Iowa following an investigation requested by the lottery. Click here for the full details from the Iowa Division of Criminal Investigation (DCI).

A ticket winning a $250,000 prize in an instant-scratch game was presented June 17 for cashing at our Storm Lake office. The ticket had won one of the top prizes in “$250,000 Riches,” a $20 scratch game that began sales in March.

There was scribbling on the back of the ticket when it was brought into our office, so the claim attempt was referred to our Security Division.

The lottery follows security procedures in prize claims to ensure that the ticket involved was legally purchased, legally possessed and legally presented. Under our security procedures, lottery tickets must be signed before they can be checked or cashed. A signature on a ticket identifies it as belonging to the person claiming the prize. If there is a question about who signed a winning ticket, the lottery reviews the details involved.   

The lottery requested the assistance of the DCI in this matter and the investigation that followed was a joint effort with the Buena Vista County Attorney’s Office and Sioux Rapids Police Department. The $250,000 prize involved has not been paid.

 

Lottery Statement Regarding Lawsuit From 2011 Jackpot Winner

You may have heard that a lawsuit was filed today against the Iowa Lottery and the Multi-State Lottery Association by a Webster City man who won a multi-million-dollar Hot Lotto® jackpot in May 2011.     

Iowa Lottery CEO Terry Rich released the following statement regarding the lawsuit:

“It is impossible to rewrite history. No one can know what would have occurred in this case had any event in it been changed.  We believe that Mr. Dawson rightfully was paid the jackpot to which he was entitled.

We at the Iowa Lottery are thankful for the work accomplished in the long-running lottery jackpot investigation by Iowa law enforcement and officials from around the country. Together, we have taken the actions necessary to ensure the integrity and security of lottery games today.

Our lottery will defend its efforts to protect lottery players in any forum, including in this litigation.”

 

NEW EVIDENCE IN LOTTERY JACKPOT INVESTIGATION

The long-running lottery jackpot investigation that began here in Iowa has been expanded again, now involving lottery jackpot prizes in five states, the latest in Kansas. A felony criminal conduct charge filed this fall that stemmed from jackpots won in Iowa, Colorado, Wisconsin and Oklahoma now also includes two jackpots claimed in Kansas.
 
At the time that all of the jackpots were won, the man at the center of the case worked as an information security consultant at a vendor organization within the lottery industry. That man, Eddie Tipton, later became the director of information security at that same vendor organization, the Multi-State Lottery Association (MUSL), which is based in Urbandale. MUSL handles day-to-day functions such as prize drawings in some lotto games on behalf of U.S. lotteries. In his work at MUSL, Tipton evaluated security systems at many U.S. lotteries and provided other information-technology duties, including software programming.    

Tipton was convicted this summer on two felony counts of fraud in the case that started the investigation nearly five years ago: the attempted claim of a lottery jackpot in 2010 here in Iowa.
 
Then in October, a felony charge of ongoing criminal conduct was filed against Tipton that initially encompassed lottery jackpot prizes won in three states: the attempted claim here in Iowa; a jackpot claimed in 2005 in Colorado; and another in 2007 in Wisconsin. A jackpot claimed in 2011 in Oklahoma was added to the charge in November. And now, two jackpot prize claims in 2010 in Kansas also have been added to the charge.

In all of the incidents, Tipton is charged with violating Iowa’s ongoing criminal conduct statute. The criminal complaint against him stipulates that he helped build the random-number generator equipment used in the jackpot drawings for the prizes involved. The complaint also stipulates that according to court testimony earlier this year, he had the technical ability and opportunity to tamper with the drawing equipment that picks the winning lottery numbers in order to make the numbers predictable.       

The Iowa and Oklahoma jackpots were both won in the multi-state Hot Lotto game. The jackpots in Colorado and Wisconsin were won in different games offered only in those states. The Kansas jackpots also were won in a separate game. 

From the beginning, we here at the Iowa Lottery have asked investigators to follow the evidence wherever it led to help get to the bottom of the situation. This latest development is another step in the process to protect lotteries, our games, our players and the billions of dollars at stake for the worthy causes that lotteries benefit.

 

New Evidence In Lottery Jackpot Investigation

The long-running lottery jackpot investigation that began here in Iowa has been expanded again, now involving lottery jackpot prizes in four states, the latest in Oklahoma. A felony criminal conduct charge filed last month that stemmed from jackpots won in Iowa, Colorado and Wisconsin now also includes the new details from Oklahoma.

At the time that all of the jackpots were won, the man charged in the case worked as an information security consultant at a vendor organization within the lottery industry. That man, Eddie Tipton, later became the director of information security at that same vendor organization, the Multi-State Lottery Association (MUSL), which is based in Urbandale. MUSL handles day-to-day functions such as prize drawings in some lotto games on behalf of U.S. lotteries. In his work at MUSL, Tipton evaluated security systems at many U.S. lotteries and provided other information-technology duties, including software programming.    

Tipton was convicted this summer on two felony counts of fraud in the case that started the investigation nearly five years ago: the attempted claim of a lottery jackpot in 2010 here in Iowa.   Then in October, a felony charge of ongoing criminal conduct was filed against Tipton that initially encompassed lottery jackpot prizes won in three different states: the attempted claim here in Iowa; a jackpot claimed in 2005 in Colorado; and another in 2007 in Wisconsin. The evidence in the criminal conduct charge now also includes a jackpot prize claim in 2011 in Oklahoma.

Tipton is charged with violating Iowa’s ongoing criminal conduct statute. The criminal complaint against him stipulates that he helped build the random-number generator equipment used in the jackpot drawings for the prizes involved. The complaint also stipulates that according to court testimony earlier this year, he had the technical ability and opportunity to tamper with the drawing equipment that picks the winning lottery numbers in order to make the numbers predictable.       

The Iowa and Oklahoma jackpots were both won in the multi-state Hot Lotto game, while the jackpots in Colorado and Wisconsin were won in different games offered only in those states.

From the beginning, we here at the Iowa Lottery asked investigators to follow the evidence wherever it led to help us get to the bottom of the situation. This latest development is another step in the process to protect lotteries, our games, our players and the billions of dollars at stake for the worthy causes that lotteries benefit.

New Charge Filed, Lottery Jackpot Investigation Expands To CO, WI

 

 

A new arrest has been made in that long-running lottery jackpot investigation that began here in Iowa. The investigation now has been expanded and includes jackpot prize claims from Colorado and Wisconsin.

Click on the video above to see details from the news conference where the new charge was announced. Click here to see the announcement from the Iowa Department of Public Safety.