Lottery fraudster Eddie Tipton sentenced to 25 years


eddie-tipton-lottery-fraud-sentenceConvicted lottery fraudster Eddie Tipton has been sentenced to 25 years in prison just as America braces for the second-highest jackpot in Powerball history.

In June, Tipton reached a deal with Iowa prosecutors to plead guilty to a single count of ongoing criminal conduct related to his role in a conspiracy to rig Multi-State Lottery Association (MUSL) drawings. At the time, prosecutors announced they would seek the maximum punishment available.

On Tuesday, District Court Judge Brad McCall sided with those prosecutors, sentencing Tipton to the maximum 25 years in prison, although Tipton will be eligible for parole in as little as three years’ time. A Wisconsin judge previously sentenced Tipton to five-and-a-half years after he pled guilty to theft, fraud and computer crime, but McCall will be allowed to serve both sentences concurrently.

Tipton and his co-scammers – brother Eddie Tipton and mutual friend Robert Rhodes – claimed seven fraudulent lottery jackpots in five different states over a number of years before their scam spectacularly unraveled in 2011 when they made a ham-fisted attempt to anonymously claim their largest prize, a $16.5m Iowa Lottery Hot Lotto jackpot.

Tipton formerly worked as a computer information security director for the MUSL, a job that allowed him access to MUSL servers. Tipton installed a ‘rootkit’ device that caused the servers’ random number generator to deliver specific sets of winning numbers on specific drawings, for which the scammers would purchase guaranteed winning tickets.

Tommy Tipton, Rhodes and some other ‘beards’ were tasked with claiming the prizes in exchange for a cut of the profits. Tommy Tipton is currently serving a 75-day sentence in Texas, while Rhodes, who has pled guilty to fraud, will be sentenced Friday.

The Tipton brothers have been ordered to pay $3m in restitution to the various lotteries they defrauded, with Eddie Tipton responsible for $2.2m of that total. However, Tipton told Judge McCall on Tuesday that he wasn’t sure how he’ll be able to repay that sum.

Meanwhile, Wednesday’s Powerball jackpot is expected to top $700m, ranking second in size only behind last year’s record $1.6b prize, which was claimed by three different winners. The $700m would be issued via annual payments over 29 years, while the one-time cash option will be worth $443m (minus 25% to the IRS in addition to local state taxes). The Powerball jackpot has not been hit since June.