Lottery rigger pleads guilty, faces up to 25 years
Eddie Tipton, the former security chief accused of rigging lottery drawings in several states, could face up to 25 years in prison under a plea agreement worked out with prosecutors in Iowa and Wisconsin.
The agreement released Monday shows Tipton will plead guilty to three felony charges in Iowa and Wisconsin for his central role in a six-year scheme that prosecutors say allowed him, brother Tommy Tipton and a close friend to cash in on lottery drawings in Wisconsin, Kansas, Oklahoma and Colorado.
"All of the states agreed that this is a good resolution," Assistant Iowa Attorney General Rob Sand, the prosecutor on the case, said Monday during a meeting with reporters.
Tommy Tipton is expected to plead guilty to theft charges in Iowa and could serve 75 days in jail.
The document calls for the brothers to pay back a total of $3 million in restitution. Sand declined to answer questions about the brothers' ability to make payments, citing the still-pending plea hearings for both men.
Eddie Tipton, 54, formerly worked as the information security director for the Urbandale-based Multi-State Lottery Association that administers games like Powerball, Megamillions and Hot Lotto nationwide.
Investigators contend that Tipton's insider access allowed him to manipulate computers so that he could determine the winning numbers if a drawing met certain conditions, including certain days of the year and week.
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Tipton was exposed and first arrested in 2015 after an investigation into a now-infamous attempt to cash a $16.5 million Hot Lotto jackpot using a ticket purchased by a hooded figure at a Des Moines QuikTrip. Lottery officials in Iowa and elsewhere recognized Tipton as the ticket purchaser.
Tipton appeared in a Wisconsin courtroom at 2 p.m. Monday to plead guilty to charges of theft by fraud and computer crime. Under the terms of the agreement, both prosecutors and defense attorneys agreed that Tipton should be sentenced to serve somewhere between three to four years in prison and another five years of "extended supervision" following his release.
The former lottery official will be under the custody of the Iowa Department of Corrections, meaning a sentence would be served in a prison here.
Tipton will plead guilty in Iowa to a felony count of ongoing criminal conduct. Sand will recommend a maximum 25-year prison sentence. The agreement allows Tipton to serve the Wisconsin sentence at the same time he is serving any prison time in Iowa. A hearing is scheduled in Iowa for June 29, court records show.
There is no mandatory minimum sentence that Tipton has to serve before being eligible for parole, Sand said Monday.
The agreement requires Tipton to give lottery officials "truthful testimony of all facts related, directly or indirectly, to their actions to fix, win and claim lottery jackpots." Investigators have agreed not to charge either Tipton brother with any new crimes based on information they learn through the interviews.
"As these cases reach conclusion, we look forward to the process to help answer any remaining questions about exactly what occurred," Iowa Lottery CEO Terry Rich said in a statement. "This information will be valuable to the Iowa Lottery and the lottery industry as a whole to help us safeguard our games and protect our players."
Tommy Tipton, a former Texas justice of the peace, will plead guilty to felony and misdemeanor charges in Iowa of conspiracy to commit theft. He was dragged into the case after news coverage of his brother's first trial prompted a tip to authorities that he'd won a 2005 Colorado drawing. That tip led investigators to a friend whom Tommy Tipton had recruited to claim the money on his behalf, according to court documents.
Both Sand and attorneys for Tommy Tipton agreed to recommend a 75-day sentence of incarceration on the misdemeanor charge and a deferred judgment on the felony charge with a probation period to last the length of his jail sentence. Tommy Tipton's criminal record will be expunged once the sentence is completed and there will be no restrictions on his ability to use or own firearms, according to the agreement.
Sand said Tipton, a firearms trainer, will be allowed to keep guns, even as a felon, because they play a substantial role in his ability to earn an income. "The states want him to be able to repay his restitution and so we want him to be able to have income after his term of incarceration has ended," he said.
He will be required to pay $804,095 in restitution to the Colorado and Oklahoma state lotteries.
The plea agreement comes after a third alleged conspirator in the case, Texas businessman Robert Rhodes, pleaded guilty to charges in Wisconsin and Iowa in exchange for six months of house arrest. Rhodes agreed to testify against the two brothers if their cases ever went to trial.
Eddie Tipton was convicted of two counts of fraud in 2015 after a trial focused on the unsuccessful attempt to cash the Iowa Hot Lotto ticket worth millions. He received a 10-year prison sentence, but that case is on appeal to the Iowa Supreme Court. As part of the plea agreement, prosecutors agreed to wipe those convictions off his record if they are not dismissed or overturned.
Defense attorney Dean Stowers has argued that there were flaws in the first conviction, which was based on a prosecutor's theory that Tipton could have used a flash drive to install software that manipulated the drawing. Stowers declined to comment Monday.