Scammers keep millions in property
Pair rigged lotteries, repaid less than $1,400
DES MOINES, Iowa – Two brothers who directed the biggest lottery scam in U.S. history repaid less than $1,400 in restitution despite owning property worth nearly $2 million, a Des Moines Register and Corpus Christi (Texas) Caller Times investigation found.
Eddie and Tommy Tipton admitted rigging drawings in at least five states worth a combined $24 million.
They barely made a dent in the more than $2.4 million they were ordered to pay in restitution even though they own more than a half-dozen properties in Texas that are worth nearly as much as they owe, according to records the Register obtained.
At the pair’s current rate of repayment, Oklahoma – one of the five state lotteries the brothers scammed – estimated it will be fully reimbursed in 190 years.
“How do these guys slip through the loop every damn time? They’re like Tef-
“Our law enforcement team in Iowa did not work hard for three years to now see other states make a minimum effort to collect. Hopefully, this is a wake-up call.”
Rob Sand, Iowa state auditor
lon,” said Allen Weise of Flatonia, Texas, who provided information about the brothers and their properties to Iowa prosecutors before their convictions in
2017.
Eddie Tipton, mastermind of the “random number” scam and former security chief of the Urbandale, Iowa-headquartered Multi-State Lottery Association, remains in prison, serving a sentence that could last up to 25 years. His job barred him from playing the lottery because the association provides games for state lotteries across the USA.
His brother, Tommy, a former justice of the peace from Flatonia, Texas, who admitted helping his brother hijack the world’s largest lottery network, served a
75-day jail sentence and has been off probation for 15 months.
Using “random” numbers generated from a computer program designed by his brother at the Multi-State Lottery Association, Tommy Tipton acknowledged that he helped to claim prizes in at least two states: Colorado and Oklahoma.
Eddie Tipton was ordered to pay almost $1.7 million in restitution while Tommy was ordered to pay more than
$800,000.
From prison, Eddie Tipton paid almost $800. His brother repaid $587, court records show.
The brothers retain full or partial ownership in more than $1.8 million of property in Fayette County, Texas, where Flatonia is located about halfway between Houston and San Antonio.
Since Tommy Tipton was released from jail on probation Sept. 15, 2017, he has:
❚ Sold at least two properties with a combined market value of more than
$635,000.
❚ Continued to own his longtime home with a pool valued at almost
$780,000.
❚ Remained the sole owner of at least five business or investment properties that have a combined market value of $572,950.
❚ Continued as a joint owner with his imprisoned brother in at least two properties and has mineral rights on a third valued at $105,420.
No state has pursued the legal actions outlined in the Tiptons’ plea deals that entitle the defrauded lotteries to lay claim to the brothers’ property or to property that the Tiptons placed in the names of associates and family members.
When the Register contacted Tommy Tipton, he declined to discuss his work, income or properties.
He said in that brief interview that his brother, Eddie, “ain’t never done anything wrong in his life” and vowed that the two would once again work together.
“It’s hard. I’m a single dad raising three kids on a very limited income with lots of bills, and when Eddie gets home, he probably will create something,” Tommy Tipton said. “He’s a smart, intelligent guy. Hopefully, the future will be better, and we’ll get all that stuff paid back.”
In 2007, Eddie Tipton built a roughly
5,000-square-foot home in Norwalk, Iowa, a Des Moines suburb.
That was two years after he embedded fraudulent computer code into random-number-generating software that several state lottery games distributed and used.
The random-number fraud allowed him to accurately predict at least five winning drawings that totaled more than $24 million in Colorado, Iowa, Kansas, Oklahoma and Wisconsin.
The multi-year scheme unraveled in
2010 after a Des Moines convenience store video captured Eddie Tipton purchasing what would become a $16.5 million ticket. Iowa Lottery officials refused to cash that ticket after some of Tipton’s associates on multiple occasions tried to redeem the ticket anonymously.
After years spent fighting criminal charges, Eddie Tipton pleaded guilty to “ongoing criminal conduct” in 2017.
Iowa prosecutors were aware of his Norwalk home that contained a movie theater and gym, overlooked a pond and sat on nearly 23 acres.
He sold the property in July 2015 for
$590,000.
At the time Eddie Tipton sold his home, prosecutors knew only about the Iowa Hot Lotto ticket that state officials had refused to cash.
In late 2015, prosecutors learned that he had rigged lottery wins in other states.
As a result, Iowa Attorney General Tom Miller’s office attempted in March
2016 to gain access to Eddie Tipton’s Norwalk home, office equipment, multiple vehicles and his checking, savings and futures trading accounts.
Eddie Tipton argued in court filings that the lien was unconstitutional because it would interfere with his constitutional right to counsel and result in a deprivation of property without due process.
Judge Brad McCall of Polk County District Court in Des Moines agreed and dismissed the state’s attempt to place liens against the property.
Some of the money that Eddie Tipton scammed in rigged drawings was acquired a decade before his arrest, records show.
Many banks and financial institutions are not required to maintain records that old, which made it difficult for prosecutors to directly link Eddie Tipton’s assets with the winnings, said Rob Sand, a former lawyer for the Iowa Attorney General’s Office who helped prosecute the Tipton cases.
“Unless we could very specifically and very clearly show that the money he was paying for them (properties) with was stolen money, we couldn’t do anything about it,” said Sand, who was elected as Iowa’s state auditor in November.
It’s “absurd” that states and their lotteries have not taken further action to claim restitution from the Tiptons, Judge Ed Janecka of Fayette County, Texas, told the Register.
In 2015, Janecka successfully urged Tommy Tipton to resign from his elected judicial position because of Tipton’s involvement in the lottery fraud, Janecka said.
“This is just wrong, and the states need to come back with a vengeance,” Janecka said.
The Register contacted the lotteries and attorneys general offices in each state where Tommy or Eddie Tipton owe restitution.
Conversations continue about which state should take the lead on actions that could result in seizing property, said Jay Finks, a spokesman for the Oklahoma Lottery.
Some of the games fraudulently won in the scandal were part of multi-state networks.
“It kind of creates a layer of complication we’re trying to navigate,” Finks said.
The land records the Register obtained should alert states to take further action, Sand said.
“Our law enforcement team in Iowa did not work hard for three years to now see other states make a minimum effort to collect,” Sand said. “Hopefully, this is a wake-up call.”