CLIVE, Iowa -- An Iowa jury has convicted a former multi-state lottery association official of fraud in a case where prosecutors said he rigged a Hot Lotto game drawing to win a $14.3 million prize. Eddie Tipton, 52, of Norwalk, Iowa, could be sentenced to up to 10 years in prison on his conviction for two counts of fraud, reported Reuters.
In December 2010, a man bought a Hot Lotto ticket at a Des Moines, Iowa, convenience store. That ticket won the Hot Lotto drawing on December 29.
For nearly a year, the prize went unclaimed. Then, with less than two hours to go before the prize would have expired on Dec. 29, 2011, lawyers on behalf of a New York investment trust that had been established to benefit a corporation in the country of Belize presented the winning ticket. Neither the two lawyers who presented the ticket nor anyone associated with Hexham Investments Trust of Bedford, N.Y., would provide the basic details necessary to verify that the ticket had been legally purchased, legally possessed and legally presented. Those involved said they could not identify the jackpot winner or the man who purchased the winning ticket.
Lottery officials routinely request that standard information from jackpot winners in Iowa as part of the lottery's security processes to comply with both state law and lottery game rules. It usually receives those details within minutes of the time a winning ticket is presented.
On Jan. 26, 2012, Crawford Shaw, a New York attorney who identified himself as the trustee of Hexham Investments Trust, withdrew the claim to the jackpot. The Iowa Lottery requested that the Iowa Attorney General's Office and the Iowa Division of Criminal Investigation open a criminal investigation into the matter.
The case focused on a video of a man in a hooded sweatshirt who bought the winning ticket at the convenience store. Tipton's co-workers testified that the man in the video looked and sounded like him, while Tipton's family said he was larger than the man in the video. Lottery employees are barred from playing by law.
"There is no doubt this has been a fascinating case,” Iowa Lottery CEO Terry Rich said in statement issued following the jury's verdict in the Polk County District Court trial. “The facts in this case have enabled us to further enhance our layers of security to protect the integrity of lottery games, and that ultimately has been a positive.”
He continued, “This case is an important reminder that lotteries have to keep monitoring and making improvements to stay ahead of those who would try to beat the system. As a society, we may never be able to stop people from trying to commit crime, but we need to have strong procedures in place to catch and prevent them when they do.
“I have confidence that the games we offer today are fair. Our lottery has strong layers of security to protect lottery players, lottery games and lottery prizes. Those procedures enabled us to seek information about the winning ticket in this case and not pay the prize until basic questions could be answered—and they never were.
“There was no prize paid in this instance. The money from this jackpot, which totaled nearly $10.8 million in cash, was returned to the lotteries in the Hot Lotto game in proportion to the sales from each jurisdiction. The Iowa Lottery received about $1.4 million back and gave the money away in a special summer promotion called 'Mystery Millionaire' back in 2012; 15 players ended up winning prizes in that promotion.
“The details in this case are important for anyone who has ever played a lottery game, the good causes benefitted by lotteries and the billions of dollars at stake. There obviously were indications that something was amiss with this particular prize claim. This case has provided our lottery with an opportunity to better pinpoint potential security risks and update our procedures to protect against them."
Tipton is scheduled to be sentenced on September 9, said Reuters.
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