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How One Man Rigged the Lottery – America’s Biggest Lottery Scam

After years of searching for the mystery winner of a US$14.3 million Hot Lotto jackpot, the Iowa police investigation took an unexpected and dramatic turn when they discovered the winner was a lot closer to home then they had thought.

Lawyer Claims Jackpot for Suspicious Offshore Corporation in Belize

In December 2010, the Hot Lotto jackpot of US$14.3 million was won by a player who had bought a ticket at a Des Moines gas station. After a long time with no winners coming forward, the first of many claims for that jackpot was made by Canadian lawyer Philip Johnston. In November 2011, he claimed he was too sick to come and provided a unique 15-digit security number printed on the winning ticket. Though the code was right, he was unable to answer several security questions and the claim was ultimately turned down. On 6 December 2011, Johnston tried yet again, this time stating he was claiming the ticket on behalf of the winner, who wished to stay anonymous. The winner, he stated, had set up a trust based in the tax haven of Belize called “Hexham Investments”. This bid was turned down as well because according to Iowa Lottery regulations, winners must be identified to the public.

A few weeks later, on 29 December 2011, right before the deadline expired, the Iowa Lottery received a jackpot claim from a Des Moines law firm complete with a physical winning ticket signed by Hexham investments and New York lawyer Crawford Shaw. The issue this time was that they misspelled Hexham Investments. This mistake cost a very mysterious winner the jackpot prize once again. In January 2012, Shaw met with the lottery board, who asked him to divulge the names of every person or entity ever having been in possession of the ticket. The New York lawyer refused and subsequently withdrew the claim altogether. This set off the alarm bells – officials are especially concerned when claimants are evasive on the issue of ticket ownership as foul play is suspected.

All sorts of conspiracy theories took root. Was this a case of lottery winner being murdered? Was the winner a victim of blackmail or theft? Dangers and mishaps have befallen past lottery winners, some of whom were lucky to escape with their lives, causing many winners to hide their winning lottery tickets in really weird places.

Criminal Investigation of a Hooded Mystery Man

The lottery launched a full-scale investigation into the question why no one had yet claimed the US$14.3 million jackpot. It was a fact that the winner had bought the ticket at a lottery retailer, so the authorities were able to start their investigation with relative ease. They sifted through many hours of security footage from the Des Moines gas station, checked car license plates, and even analysed the buyer’s voice in the video. At a full-scale public appeal, officials released camera stills of the mystery ticket buyer wearing a hoodie and stated that they weren’t sure whether the man was a fraudster or a victim of crime.

Finally, a former colleague of the ticket buyer contacted the authorities. The information he provided shifted the investigation and soon the authorities were able to pinpoint the identity of the mysterious buyer.

The hooded winner was none other than the 51-year-old security director of the Multi-State Lottery Association in Iowa, Eddie Raymond Tipton. As a lottery association employee, Tipton had been fully aware of the fact that he was legally prohibited from participating in his own lottery. Tipton had taken steps to hide his identity to his employer and have the prize claimed on his behalf by a lawyer. Iowa criminal investigators had Tipton arrested following the shocking discovery and in 2017, he was sentenced to 25 years in prison and a payment of US$2.2 million for fraud.

Why did he do it? Surprisingly, in the beginning, it wasn’t totally for the money. In 2005, a former colleague named Gene Schaller asked Eddie if he had entered his lucky numbers. “Well, you know, you can set numbers on any given day, since you wrote the software.” According to Tipton, this conversation is what got the ball rolling and he admitted to investigators that he initially did it simply because he could. It was never supposed to turn into a full-blown lottery ticket scam.

The serious crime here is not that Tipton had participated in a lottery draw when he was prohibited from doing so, rather that he had rigged the lottery to ensure that he would win!

How exactly did he rig the lottery? Apparently he had programmed the random number generator to produce knowable outcomes if the drawing occurred on certain dates. Complicated? Possibly, but not if you know the outcome of those draws in advance.

As of 2019, lottery officials were nearing a final settlement agreement in a class-action lawsuit for thousands of lottery players who bought tickets for rigged Hot Lotto drawings. The expected settlement set up a US$4.3 million fund to reimburse players, as well as pay for attorney fees and other expenses related to the case. Iowa Lottery official planned a website for victims of what is deemed the biggest lottery scam in America’s history, where they can submit and download claim forms.

The lottery organisation’s wariness can be understood as money often brings out the worst in some people. Lottery tickets are available almost anywhere these days; you can buy lottery tickets at your local lottery kiosk or you can buy lottery tickets for the world’s biggest lotteries through online lottery providers. Tipton’s scheme for winning the lottery brought him more misfortune than actual fortune. If he had played the lottery online, he wouldn’t have been able to get into this predicament in the first place.

Whichever lottery you choose to play, have fun and best of luck!

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