Former Security Director For Lottery Charged With Tampering Equipment Before Secretly Buying $14.3 Million Winning Ticket

from the security-director? dept

If someone hasn't already sold the movie rights to the story of Eddie Raymond Tipton, expect it to happen soon. Tipton, an Iowa-based former "security director" for the Multi-State Lottery Association (MUSL), is accused of trying to pull off the perfect plot to allow himself to win the lottery. It didn't work, but not for the lack of effort. MUSL runs a bunch of the big name lotteries in the US, including Mega Millions and Powerball. It also runs the somewhat smaller Hot Lotto offering, which was what Tipton apparently targeted. When he was arrested back in January, the claims were that it had to do with him just playing and winning the lottery and then trying to hide the winnings. Lottery employees are (for obvious reasons) not allowed to play. However, late last week, prosecutors in Iowa revealed that it was now accusing Tipton of not just that, but also tampering with the lottery equipment right before supposedly winning $14.3 million. Because of these new revelations, Tipton's trial has been pushed back until July. However, the details of the plot and how it unraveled feel like they come straight out of a Hollywood plot.

First, there's the story of how Tipton was discovered winning the lottery in the first place. The ticket was purchased in late December 2010 in a QuickTrip off of Highway 80 in Iowa. The winning $14.3 million went unclaimed for nearly a year, but right before it was set to expire, a New York lawyer named Crawford Shaw showed up with paperwork to claim it. However, Shaw refused to reveal the necessary details about who actually won the money, as Shaw was merely representing Hexham Investments Trust, which was a shell company set up in Belize. Belize, as you already know, is a popular place to setup offshore companies if you want the true ownership to be anonymous. The problem, however, is that Iowa doesn't allow for anonymous lottery winners. That resulted in Iowa officials investigating who was really behind the winning ticket.

The resulting investigation took them from the NY lawyer Shaw to some (unnamed) guy in Quebec City, Canada, who was listed as Hexham Investments Trust's trustor and president. That guy eventually pointed investigators to two other guys in the Houston area: Robert Rhodes and an unnamed Houston attorney -- who had also known the NY attorney, Shaw, for many years. The attorney in Houston insisted that he represented the winner of the ticket who wished to remain anonymous. Somewhat stumped, investigators released a video and screenshots of the guy at the QuickTrip who bought the ticket:
A colleague of Tipton's at the MUSL told investigators that it was Tipton. Investigators then discovered that Rhodes and Tipton had gone to University of Houston together and frequently talked to each other by phone. After some more investigating, Tipton was officially arrested and charged with fraud in January.

And that's where the story stood until just recently. In March, Rhodes was also arrested for fraud and then prosecutors revealed that Tipton was in the draw room in November, a month before the winning ticket was purchased and that they believe he tampered with the equipment:
Prosecutors also argued in their reply that Tipton was in the draw room on Nov. 20, 2010, "ostensibly to change the time on the computers." The prosecution alleged the cameras in the room on that date recorded about one second per minute instead of how they normally operate, recording every second a person is in the room.

"Four of the five individuals who have access to control the camera's settings will testify they did not change the cameras' recording instructions; the fifth person is Defendant," the prosecution wrote.

It is a reasonable deduction to infer that Defendant tampered with the camera equipment to have an opportunity to insert a thumbdrive into the RNG tower without detection."
Of course, some of the additional evidence seems purely speculative. For example, prosecutors quote Tipton's co-workers talking about his "obsession" with rootkits:
In their reply to the defense's motion, prosecutors argued that Tipton's co-workers said he "was 'obsessed' with root kits, a type of computer program that can be installed quickly, set to do just about anything, and then self-destruct without a trace." The prosecution claimed a witness will testify that Tipton told him before December 2010 that he had a self-destructing root kit.
Honestly, that part of it feels pretty weak, and one would hope they have more extensive evidence to support that claim. However, given all of the other evidence in the case, and the timing of all of the events, it certainly does raise reasonable questions about just what Tipton was up to in that room.

Filed Under: eddie raymond tipton, fraud, hot lotto, iowa, lottery, rootkits, scam
Companies: multi-state lottery association, musl

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  1. identicon
    Anonymous Coward, 15 Apr 2015 @ 8:51am

    Re: Re: Re: "given all of the other evidence"


    There are 2 chains in the US that call themselves that.

    One spells it KwikTrip.

    The other spells it QuikTrip.

    Presently both are in different markets. I can only imagine the confusion that would result - like what already exists in this article - if they both entered the same market.

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