Iowa High Court Grills Both Sides in Lotto Fraud Case

(CN) – The Iowa Supreme Court heard arguments Monday on whether purely circumstantial evidence was enough to convict a former lottery employee of rigging Iowa’s Hot Lotto game to win a $16.5 million jackpot.

Eddie Tipton was convicted of tampering with Iowa’s Hot Lotto game and attempting to cash a ticket in early 2015, but an appeals court reversed his conviction on the charge of attempting to redeem the lottery ticket, finding it was barred by the three-year statute of limitations.

The Iowa Supreme Court heard arguments in the state’s appeal of that ruling in a rare evening session Monday night.

Tipton’s attorney Dean Stowers sought both to overturn the conviction based on the sufficiency of the evidence, and on statute of limitations grounds, but he faced a skeptical bench.

“The coincidences add up beyond belief,” Justice Brent Appel said. “What are the odds someone walks into the QuikTrip and comes out with $16.5 million?”

Stowers said the odds were not in the record.

Tipton worked for the Multi-State Lottery Association as the information security director responsible for the software that generates random numbers for lottery games.

According to a multiple criminal complaints filed against him, he planted a modified software code in the random number generator that produced a predictable set of winning numbers when certain conditions were met.

He allegedly used his insider knowledge to win a $569,000 Colorado jackpot, a ticket cashed by his brother, and a $783,257.72 jackpot in Wisconsin, a ticket cashed by his friend Robert Rhodes.

But winning twice – and getting away with it – wasn’t enough for Tipton, according to the state of Iowa.

On Dec. 29, 2010, Tipton himself allegedly purchased a winning ticket for Iowa’s Hot Lotto jackpot worth $16.5 million. Four years later, the state released the video of the purchase to the public in hopes of identifying the purchaser. Another lottery association employee recognized Tipton as the buyer.

However, Tipton never cashed the ticket, and it is unclear how it wound up in the hands of a New York attorney who tried to claim the ticket on behalf of a shell company in Belize hours before it would expire.

Stowers told the Iowa Supreme Court on Monday there was “zero evidence” that Tipton tampered with the lottery computers. He mocked the idea that his client could have stuck a thumb drive into the computer, with other people in the room, altered the computer without a trace, then “snuck out of the room – with his 300-pound self.”

He compared Tipton’s conviction to a man charged with arson because he bought a gas can a month prior and knew how to use a match.

“Circumstantial evidence is not sufficient,” Stowers said. He also cast doubt on the witness identifications of Tipton as the man in the QuikTrip video buying the winning ticket.

During the state’s argument, the judges grilled Assistant Attorney General Louis Sloven on the statute of limitations issue, pointing out that the state knew almost immediately there was “something fishy” about the fact that no one came forward to claim the jackpot.

“Don’t you have to use reasonable diligence to find the perpetrator?” Justice David Wiggins asked. “[And yet] you waited three years to put the tape out.”

Sloven said the state wanted to avoid wasting time on fraudulent claims, and had no way of knowing releasing the video would yield an almost immediate identification of a suspect.

“It’s really unfair to call it unreasonable in hindsight,” the state’s attorney said.

Sloven forcefully argued that tampering is a form of fraud in this context, and the statute of limitations should be tolled because the state was not aware of the tampering until 2014.

Surveillance footage presented at trial showed Tipton entering the “draw room,” which housed the two number-generating computers, one month before the winning numbers were drawn, allegedly to update the dates on the computers. The next month, both computers were wiped, according to court records. However, there is no direct evidence showing any change in the computer’s approved software.

The Iowa Supreme Court is expected to issue its decision in 90 days.

Tipton also faces pending criminal charges for his Wisconsin lottery win.

An Iowa trial court initially sentenced Tipton to 10 years in prison, but he has been free while his appeal was pending, according to an Associated Press report.

The state also faces a class action filed by Iowa lottery players demanding a refund for the money they spend playing games rigged by Tipton.