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Former lottery security employee guilty of rigging $14.3M drawing

Jul 20, 2015, 2:21 pm

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Hot Lotto

Jurors convicted a former Iowa lottery security official of two counts of fraud Monday for rigging a Hot Lotto drawing to win $14.3 million.

The jury's verdict came after three days of witness testimony last week in the case against Eddie Tipton, 52, who faces up to 10 years in prison. It's believed to be the first prosecution of a person accused of tampering with lottery equipment to manipulate a draw.

Tipton stared straight ahead with his hands folded as the verdict was read, showing no emotion. He will remain free on bond ahead of his sentencing hearing Sept. 9.

He left the courthouse without comment. But his lawyer, Dean Stowers, said the verdict was "not surprising," because the jurors were given speculative evidence.

Stowers said he's confident the appeals court ultimately will toss the jury's conviction.

Assistant Iowa Attorney General Rob Sand accused Tipton, formerly the information security director for the Multi-State Lottery Association, of installing a self-deleting computer program, called a rootkit, onto a Hot Lotto drawing computer to rig the outcome of a Dec. 29, 2010, drawing.

Tipton allegedly purchased the winning ticket six days earlier at a Des Moines QuickTrip.

Sand claims Tipton then helped filter the ticket through a Texas friend and a network of lawyers in an attempt to claim the cash. The two fraud charges required the state to prove beyond a reasonable doubt that Tipton tampered with the lottery computer and then passed on the ticket as part of a conspiracy to redeem it.

In his closing argument Friday, Sand pointed toward several pieces of evidence that jurors could rely on to convict Tipton, including:

  • Several of Tipton's friends and coworkers at the lottery association testified they believe Tipton was the purchaser, based on video of a hooded man buying the ticket. The witnesses said Tipton's voice matched that of the man on the video.
  • Jason Maher, the lottery association's IT director, said Tipton once told him he had access to a rootkit, though he did not specify in court more details about the program's capabilities.

Iowa Lottery CEO Terry Rich in a statement Monday called the case "fascinating." But he said it has enabled the lottery to "to further enhance our layers of security to protect the integrity of lottery games, and that ultimately has been a positive."

The money from the jackpot, totaling nearly $10.8 million in cash, "was returned to the lotteries in the Hot Lotto game in proportion to the sales from each jurisdiction," Rich said. "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. Fifteen players ended up winning prizes in that promotion."

Rich said he is confident the games are fair.

"Our lottery has strong layers of security to protect lottery players, lottery games and lottery prizes," he said. "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."

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