Biggest Lottery Scam in U.S History: How Lottery Company Exec Stole Over $20 Million

In a world filled with dreams of instant wealth, the appeal of the lottery is almost irresistible. The mere thought of holding the gold ticket that could change one’s life is exciting.

This is the case of Eddie Raymond Tipton, a lottery organization director who planned and carried out one of the biggest lottery scams in US history. The question on everyone’s mind is this. How did Tipton get away with creating such an elaborate fraud? Read on to find out.

The Allure of Jackpots

The possibility of getting a jackpot entices many lottery players. They believe they can turn a small investment into a fortune. However, the potential of a life-changing win creates an ideal breeding ground for fraudsters who prey on the vulnerability of eager players.

There are many ways in which lottery fraudsters carry out their scam. Some can use a forged ticket to claim a lottery win (as seen in the image above). While others can use their position within the lottery organization to claim the lottery win for themselves.

Meet Eddie Raymond Tipton – The Face Behind The $20 Million Lottery Fraud.

One of the most significant cases of lottery ticket fraud worldwide is the Hot Lotto fraud, which had Eddie Tipton as the mastermind. Surprisingly, Eddie was the information director for the Multi-State Lottery Foundation when he confessed to his crimes.

Eddie Tipton was convicted in 2015 of rigging the Hot Lotto and accessing about $14.3 million. Upon his arrest in 2015, Tipton admitted to defrauding several states of over 24 million dollars over several years. But how did he go about it and stay undetected for so long?

Gamer Gone Rouge – The Inception of Eddie Tipton’s Plan.

Eddie Tipton was a gaming geek, loving the popular game ‘Dungeons and Dragons’. This probably influenced his fascination with how the lottery numbers worked. His enthusiasm resulted in him creating a cryptic two line code, which he planted on his work system.

According to Tipton, he just loved the challenge the creation of the numbers gave him. But all that changed when he Gene Schaller, in 2005. His conversation with this person about setting secret numbers on the software would lead to the start of his fraud game.

The Start of Eddie’s Fraud Game

After getting the idea that he could narrow down winning numbers using his code, Eddie Tipton devised a plan to rig the lottery system in 2005. He figured he could use the code to increase his chances of choosing winning numbers.

Tipton was able to use this code to generate five winning lottery numbers, which totaled about $24 million in prizes across five different states: Oklahoma, Iowa, Wisconsin, Kansas, and Colorado. Things became suspicious when someone tried several times to claim a lottery prize worth $16.5 million without proper identification.

The Investigation – The Beginning Of End.

When Tipton tried to claim the unclaimed $16.5 lottery jackpot in Iowa on behalf of an anonymous winner, he was unsuccessful due to the state’s rules about winners’ inability to remain anonymous. Tipton made several attempts to claim the prize money using others.

Tipton’s actions caught the attention of the Iowa Department of Criminal Investigation. Upon investigation, it was discovered that Tipton had purchased a lottery ticket from a Des Montes convenience store, which was illegal, given his employment status.

The End of Eddie Tipton

Eddie Tipton was arrested in January 2015, ten years after he started his lottery ticket fraud parade. He was arrested on two counts of fraud for attempting to claim lottery prizes and illegally participating in lottery games. While he was on trial, it was discovered that Eddie also rigged the Hot Lotto of December 29, 2010.

In his defense speech about the Hot Lotto fraud, Tipton said he went to his bosses to warn them about some security risks of errors in random game software. Although his boss took him seriously, other lottery organizations didn’t.

The Conviction

It was also discovered that Tipton was assisted by his brother, Tommy Tipton, in a series of lottery frauds in 2005. After the trial, the two were sentenced to jail. Tommy Tipton received a sentence of 75 days in prison, while Eddie Tipton got 25 years.

Tipton was to be released on parole for good behavior in 2022. However, the release was revoked due to an altercation between Tipton and another inmate. He was later paroled to Texas through an offender’s supervision program.

Spotting The Red Flags

One of the tactics of lottery fraudsters is sending an email telling you you’ve won the lottery. If you have never entered a lottery, this is one email you are free to disregard because it’s a scam.

Another red flag is when lottery agents ask you to pay them to access your winnings. A genuine lottery agent will never ask you to make payments, and they always wait for you to claim your prize until it expires.

Be Cautious

Eddie Tipton probably never thought he would get caught in his lottery ticket scam. His position as a director at the Multi-State Lottery Foundation didn’t stop him from trying to access vast amounts of lottery funds by rigging the lottery numbers.

While the allure of a lottery win is massive, always remember that obtaining it through nefarious means is a crime. Always be careful about those who claim to have won the lottery. One can never be too cautious about online or internet fraud, so you must be vigilant. You can browse through our archive for more exciting topics.