Lottery insider’s brother arrested in jackpot-fixing scandal

This Wednesday, April 6, 2016 booking photo released by the Polk County Jail in Des Moines, Iowa, shows Tommy Tipton. Tipton turned himself in to face charges that he conspired with his brother, former lottery vendor Eddie Tipton, to win rigged jackpots worth millions of dollars in Oklahoma and Colorado. (Polk County Jail via AP)

IOWA CITY, Iowa (AP) — New digital evidence reveals how a lottery insider manipulated drawings to enrich himself and his associates, Iowa investigators said Wednesday as they charged his brother with securing jackpots in Oklahoma and Colorado worth $1.2 million cash.

Tommy Tipton, a former justice of the peace and reserve police officer in Texas, turned himself in Wednesday to face a charge of ongoing criminal conduct.

Authorities allege he conspired with his older brother, Eddie Tipton, the former security director of the Multi-State Lottery Association who was convicted last year of fixing a $16.5 million Hot Lotto jackpot. He’s also awaiting trial on charges linking him to lottery prizes in several other states.

The jackpot-fixing allegations have rocked the Multi-State Lottery Association, an Iowa-based nonprofit that administers Powerball and other games for dozens of states.

Prosecutors have alleged Tipton tampered with random number generators that he built and installed for use by state lotteries. But their case had been based on circumstantial evidence because the computers he worked on at the association had been erased or destroyed, and Tipton’s defense repeatedly cited the lack of evidence as a reason why charges should be dismissed.

But in what investigators called a significant break, court documents filed Wednesday show Wisconsin authorities were able to recover the random number generator used for a $2 million jackpot Megabucks jackpot paid out to Tipton’s best friend in 2008.

A forensic examination found that the generator had unauthorized segments of code that were installed after it had been reviewed and verified as legitimate by a lottery security firm. That code directed the generator not to produce random numbers on three particular days of the year when they fell on certain days of the week. Instead, numbers on those days would be drawn by a “multi-variable algorithm” that Tipton could predict based on his knowledge of how it worked, according to an affidavit by Iowa Division of Criminal Investigation agent Don Smith.

All six prizes linked to Tipton so far were drawn on either the days of Nov. 23 or Dec. 29 between 2005 and 2011.

“Upon re-creating the draws according to the algorithm, forensic examiners produced the very same ‘winning numbers’ from the program that was supposed to produce random numbers,” Smith wrote.

Assistant Iowa Attorney General Rob Sand, who has overseen a lengthy investigation into Eddie Tipton, said Wisconsin investigators “are due credit for these welcome developments in electronic evidence.”

Eddie Tipton was charged and fired last year after authorities released surveillance footage of a person buying the winning ticket for a $16.5 million jackpot and hot dogs at a Des Moines gas station in 2010. Colleagues identified the buyer as Tipton, a computer whiz who had unparalleled access to lottery software.

Tommy Tipton, 51, testified at his brother’s trial, saying the buyer looked nothing like his sibling. Besides, he said, Eddie doesn’t like hot dogs.

But months later, Tommy Tipton resigned his elected judicial position in Flatonia, Texas, after his name surfaced in connection with the case.

The criminal complaint filed Wednesday says that Tommy Tipton first came under scrutiny in 2006, when Texas investigators received a tip that the judge had $500,000 in cash.

He told investigators he got the money after purchasing a ticket that won a share of a $4.5 million Colorado Lotto jackpot, and recruited a friend to claim the prize because he didn’t want his wife to know about the winnings as they were considering divorce. His friend claimed the $569,000 lump sum cash option, and passed the winnings to Tipton.

At the time, investigators didn’t know that Tipton’s brother wrote and installed the program that Colorado Lottery officials used to draw the numbers.

In 2011, he purchased numbers that would win a $1.2 million Hot Lotto jackpot while traveling in Oklahoma with a friend, the complaint said. The friend’s relative claimed the $644,000 cash prize, which allegedly went back to Tommy Tipton.

He was released on bond Wednesday from the Polk County Jail. His attorney, Randy Schaffer, said he was still reviewing the allegations and didn’t want to address the merits of them.

“Until you’ve seen the evidence, it’s foolhardy to stake a position,” he said.

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