MADISON, Wis., Dec. 23 (UPI) -- Information technology security expert Edward Tipton was in charge of overseeing security for a number of state lotteries. Instead, he used his power to rig the system and bank hundreds of thousands of dollars, Wisconsin prosecutors claim.
Authorities on Thursday slapped Tipton with six felony charges, including racketeering, fraud and a handful of computer crimes, in Madison district court.
Tipton, 53, was the director of IT security at the Multi-State Lottery Association, which operates drawings and maintains security for lotteries in 37 states. Thursday's charges stem from a scheme that authorities say netted him and an associate nearly $800,000 in a Wisconsin drawing a decade ago.
Because Tipton oversaw security for the actual lotto drawings, prosecutors say that allowed him substantial influence over the winning numbers.
The associate, Texas businessman Robert Rhodes, said Tipton first approached him about fixing the December 2007 Wisconsin Megabucks jackpot about two months before the drawing.
"Tipton told Rhodes that there was a way that Tipton could give Rhodes winning lottery numbers and asked if they should take advantage of that," the 13-page criminal complaint states.
According to prosecutors, Tipton furnished Rhodes with multiple number sequences and told him to buy tickets for each -- assuring him that one would hit. Rhodes said he drove to Wisconsin to buy the tickets.
After hitting the pot, a total of $783,257, Rhodes collected the ill-gotten cash through a shell corporation and gave half to Tipton, the complaint says. Rhodes is charged with racketeering and theft.
Prosecutors claim Tipton was able to manipulate the software for number-generating machines so they would land on predictable number sequences on certain dates.
Tipton is already in jail in Iowa for fixing a 2010 drawing worth more than $14 million. Rhodes also faces charges there for allegedly trying to redeem the payout through a third party. Tipton was convicted in that case in July 2015, and Rhodes is expected to plead guilty next month.
"In my career, I've not seen anything quite like this," Dave Jobes, assistant director of Iowa's Division of Criminal Investigation, said earlier this year. "That is a flag, of course, when you have the same individual winning fairly significant jackpots in more than one state."
Iowa investigators said they were able to link Tipton to suspect drawings in other states. His brother, Tom, a former Texas justice of the peace, collected winnings in Colorado in 2005 and Oklahoma in 2011, and Tipton supposedly has ties to another winnert in Kansas. Those cases are still pending.
Attorneys for Tipton claim that the former security director is the target of a misguided prosecution and that he will answer the new charges in court. One of his fraud convictions from the Iowa case was dismissed on appeal due to a technicality.
"What the States have claimed in these cases ... is not a crime under the various statutes they rely upon," defense attorney Dean Stowers said. "The States basically have claimed that Mr. Tipton shared information about the way the computer programs that were tested and certified by third parties worked, and that does not appear to be a crime under the law of Iowa or Wisconsin."
