Iowa lottery scam’s alleged mastermind is paroled after 4 1/2 years in prison

An Iowa man convicted of rigging the lottery to fraudulently claim millions in jackpots has been paroled after 4 1/2 years behind bars.

The Iowa Board of Parole has approved the release of Eddie Tipton, th,e former information security director of the Multi-State Lottery Association, based in Urbandale. Tipton was arrested in 2015 and accused of installing computer code on lottery computers that allowed him to predict the winning numbers.

His efforts to rig the drawings were uncovered after Iowa Lottery officials grew suspicious over an anonymous attempt to claim a $16.5 million Hot Lotto jackpot.  They eventually linked Tipton; his brother, Tommy; and a longtime friend, Robert Rhodes, to suspicious winnings claimed in five states.

Tipton was convicted on two counts of fraud stemming from the scheme to claim the Hot Lotto jackpot with a ticket purchased at a Des Moines convenience store. The Iowa Supreme Court later overturned that conviction, stating that investigators had taken too long to charge and prosecute Tipton.

By then, however, Tipton was already scheduled to plead guilty to separate, but related, charges of ongoing criminal conduct. Those charges grew out of an investigation into other rigged lottery drawings.

As part of an agreement he reached with prosecutors in that case, Tipton pleaded guilty to felony charges of ongoing criminal conduct, and he confessed to having rigged the random-number generator that he and the two other men used to claim winnings in Iowa, Kansas, Colorado, Wisconsin and Oklahoma.

At his sentencing in August 2017, Tipton told the judge he “wrote software that included code that allowed me to understand or technically predict winning numbers, and I gave those numbers to other individuals who then won the lottery and shared the winnings with me.”

Tipton was ordered to serve a prison sentence of no more than 25 years and was ordered to pay $2.22 million in restitution. That amount was later reduced to $1.65 million, according to court documents and Iowa Department of Corrections records.

Tipton’s prison sentence was ordered to be served concurrently with a sentence imposed in Wisconsin, where he had pleaded guilty to felony charges of fraud and computer crime that were tied to a 2007 lottery game.

Tipton later filed court papers seeking post-conviction relief, claiming he was innocent of the crimes he had pleaded guilty to in Iowa. He argued his sentence amounted to “cruel and unusual because it has been applied to an actually innocent person.”

As part his effort to have the sentence set aside, Tipton claimed he was under duress when he pleaded guilty and said Iowa officials charged him for restitution for winnings claimed in other states where Iowa has no jurisdiction.

A trial on that issue is scheduled for Aug. 17.

The decision from the Iowa Board of Parole to release Tipton states that board members determined there was “a reasonable probability” he could be released without detriment to the community or himself.

Tipton is being released to the state of Texas, where he will be subject to the supervision of parole officers in that state.

Terry Rich, the retired CEO of the Iowa Lottery, played a key role in the investigation that resulted in Tipton’s arrest. He said Thursday he wasn’t surprised by the Board of Parole’s decision.

“In any major crime — whether it’s murder, assault or robbery — most people don’t get closure,” he said. “My bottom line was that we would get closure with him admitting that it happened, and that all three defendants confessed and said how they did it. That was my bottom line. The number of years in the sentence — I left that to the court and for the parole board to decide, and I am fine with those decisions.”

He said the feeling of closure isn’t diminished by Tipton now arguing that he was innocent of the crimes.

“Whether he’s got a good case or not, that is the fight of the current lottery group and the attorney general,” Rich said. “I wanted to do whatever it took to figure out who did this and I think that was our step in this process.”

This story was originally published by the Iowa Capital Dispatch, a sister site of the Nebraska Examiner in the States Newsroom Network.