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In the early 2010s, a major lottery fraud case known as the Hot Lotto scandal took place. It was shut down in 2015 after the mastermind of the scheme was caught. It became the biggest lottery scam in the history of the United States.
The ringleader of the Hot Lotto scandal was Eddie Tipton, who was the information security director at the Multi-State Lottery Association.
Eddie was also a gamer geek and highly skilled with computers. He manipulated the random number generator (RNG) that was used to draw winning numbers for the Hot Lotto game.
He did so by planting a two-line software code in his employer’s computer system, allowing him and his accomplices to predict the winning numbers on specific dates. His code drastically increased his odds of winning the lottery from five million to one to 200 to one.
Over the course of the operation, he managed to tamper with at least five winning drawings, amassing more than $24 million in the states of Colorado, Kansas, Wisconsin, Oklahoma, and Iowa. The largest jackpot was a $16.5 million prize in 2010. It was never cashed in.
In 2010, Eddie tried to anonymously claim the $16.5 million Hot Lotto jackpot in Iowa. It was the third largest Hot Lotto prize in history.
The claim was suspicious because it occurred less than two hours before the deadline. Ticket purchasers have a year to cash in on their winnings. The unusual claim was subjected to intense public scrutiny, and an in-depth investigation ensued.
It took investigators about three years to unravel the scheme fully. In 2015, Eddie was arrested and charged with two counts of felony fraud. His brother, Tommy Tipton, and his best friend, Robert Rhodes, were also charged with felonies related to the lottery rigging.
Rhodes, who was from Sugar Land, Texas, was sentenced to six months of home confinement and ordered to pay $409,000 in restitution. Tommy was sentenced to 75 days in jail, while Eddie received a prison sentence of up to 25 years. They both agreed to pay $2.2 million in restitution.
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