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Episode 160: Hot Lotto

2021-03-12 | 🔗

In 2010, a $16.5 million Hot Lotto ticket was sold at a gas station in Des Moines, Iowa. At first, no one showed up to claim the prize. And then, a series of lawyers tried to claim the money on behalf of a client they would not name. Things got stranger, and eventually investigators uncovered what has been called the biggest lottery fraud in U.S. history. We speak with Iowa’s state Auditor, Rob Sand, and with Ed Stefan, who spent years working at the Multi State Lottery Association.

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This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
Why some very exciting news happened here in our last night, a sixteen point: five million dollar winning hot Lotto ticket was sold here and the drawing area on December. Twenty. Third, two thousand ten. Sixteen point five, million dollar hot Lotto ticket was sold to the Quiktrip gas station on the northeast side of DES Moines Iowa, the buying of the ticket had matched all five numbers, plus the hot Lotto number, the ticket Red three hundred and twelve one thousand six hundred and twenty six thirty three hot ball. Eleven The news made local have binds all throughout the state after the numbers redrawn six days later, the Musketeers her nose headline red someone
is suddenly a millionaire, but then no one showed up with the winning team Yeah we're lottery was out. There are seen on a regular basis, hey folks check your ticket somebody's got sixteen million bucks and it was sort of this story. Why hasn't anyone come forward? This is Rob sand. I was state auditor, so every few minds rich, the head of the eye lottery would have a press conference and remind people hate. We all somebody. Sixteen million dollars check you take You know we want to pay this money out and no one came and no one came and no one can actually some people did come forward. They would Let us say: hey that was my ticket. I lost it. Ok if it can be better than no. That was my friends take it that was my brother's ticket so and so bottle. And they died, but I'm sure it was theirs those their lucky numbers. They played those numbers all the time, all kinds of stuff like that
Someone called in to say that his friend, who was a religion, Hot lotto player had just died in a car accident he asked whether he should go to the junk yard to look through the wrecked car, but each time someone called in the lottery officials would Ask for the fifteen digit serial number on the back of the ticket and each time those numbers didn't match the winning ticket. Privately one thing: I owe a lottery had that the public didn't know the lottery hand was a video of the purchaser. So then I will lotteries looking at this video and we know ok, here's very heavy said man in a leather big leather jacket, with a very low voice whose walk up to claim these tickets. If any of you had called it and said hey, it's me Phoebe I bought a ticket, we would have said. No, you don't
you might have been confused as to how we knew you didn't, but we could use that to screen people who are trying to get that sixty million dollars, but who we knew hadn't purchase the ticket now go, If we made that video public gets a lot harder to use it as a screen because that everybody nudges their heavyset middle aged friend, says hey. That could be you. A video. You should calm and Tom at you, and so we had held that back. By early November, almost eleven months had passed with no winner. The ticket was only valid through the end of December. A new bower who works for I was lottery said I was convinced it would never be claimed and then she answered call the came into the lottery office It was from a man named Philip Johnston and he had the cracked fifteen digit serial number so finally, about a month, to go before the deadline runs. Somebody calls in who knows the serial number now Mary checks, the
the peace she's talking to the man in very well actually asked him what view that must have been memorable day. You want Sixteen million dollars what we wearing when you bought that ticket and this man from Canada filled Johnston's as well probably what I normally, where sports cotton flannel pants course. Mary has seen video of the actual purchaser, the actual purchaser again is of very heavy set man. Middle aged worry, no, a leather jack and felt Johnson is describing off to be not that man so immediately. There's some suspicion about what's going on about, A month later, the man called a second time. This time he told Mary did. He had quote fibbed the first time he said was actually a lawyer calling to help his client claim the ticket, but he couldn't disclose the name of his client proposed various ways. His client could receive the money,
but Mary told him that, according to Iowa lottery rules, a winner has to identify themselves. Philip Johnston stopped calling after that and then on the day the ticket was set to expire about two hours. Before the end of the clean period. Two attorney showed up in person at the Iowa lottery Office, with the actual winning ticket in hand. They said the ticket belong to their client. A man in New York named Crawford Shaw, proffered Shaw requested that the money be paid to hex him investments, a trust in believes that is owned by none other than Philip Johnston. So what happens? The eye of a lottery says. This is just gone from weird to double weird
We know this fell. Johnston, guy, isn't the actual purchaser and we have our due diligence to do so. Hey, you need to tell us who bought this ticket and everyone who possessed it along the way or we're not gonna pay they did not get a favourable response. The response was pay us or will suit you and then the eye of a lottery to their credit said go right ahead of us Costa lottery knew if plaintiff files a lawsuit, they get to conduct recovery, which means they get the kind of find out So we had possessed this ticket earliest not as much as the people trying to claim it knew but proffered Shaw, didn't sue. He just walked away. I've been disclosing the actual purchaser decided. It was worth sixteen million dollars to maintain that person's privacy. That
is interesting. Ladies and gentlemen, a lot o jack claim has been withdrawn. We receive Day and official O Donnell note. From the lawyers here in DES Moines that represent the Hexham Investment Trust today. So I guess I'll just like to jump right into question and answers, and and let you ask whatever my regiment. What the hell, I'm Phoebe Judge this description
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sand who is working as the assistant attorney general in Iowa was handed the case file happy birthday. His boss said it was this curious, lit essentially dead. End of a investigation with. A sixteen million dollar lottery ticket. It wasn't even clear that a crime has been committed, Rob didn't know how to move forward but included in case materials. He found a dvd, the security video from two thousand ten. He watched it over and over. There are two camera angles: one taken at some distance from the register. You can't make out the person's face at all from this angle. Just what he's wearing jeans and another jacket, and his build the way he moves. The second angle is closer shot from above,
and behind the registered the man has what looks like a sweatshirt hood pulled up over his head: and a baseball cap underneath it here. Looking down most of the time even money hands the clerk, the money, so no matter how many times robs and watch the video Couldn't see much. The video had been kept from the public, but Rob sand, started to think that maybe someone out there wouldn't need to see the man's face to know who he was the big thing that we had left to do was releasing the video of the purchaser and asking the public for assistance to make that video public and to say to people.
Hey, if you think you know who this is, we want to talk to them. They put out a news release and news stations broadcast the video across the country, hello. Yes, so Nothing, there's no mistaking at his voice. This event, Stephan he spent years working at the Multi state lottery cessation. It's called me. So for short, he heard the voice and the video he knew exactly who was Eddie Tipton his calling and ahead of eighty security for the Multi State Lottery Association.
Et Stephan wasn't the only person who recognised Eddie Tipton on the video clip. In fact, no well, one of his coworkers walked into the office. One day walked into the most. This is right. After we released a video in one Africa, worker says hey no I'll come over. Here and hands Noel headphones and has put these on and then click the button well, it's just standing. There can't see the computer screen that you look at it and in this person, starts playing the video of the purchase and no access to this coworker without seeing the screen. Why am I listening to a tape of Eddie talking? another colleague at the lottery. He was a good friend of Eddie. Tippins also saw the video and recognised eddies voice, but thought it couldn't possibly be his friend there had to be something wrong, so he did a little of his own investigating
He used audio software to remove the white noise from the video file. He visited the quick trip where the ticket was purchased, to measure the height of the shells and the width of the floor tiles, and then He did some sort of analysis to try to show, for example, that the feet of the man in the video were to be. It small to be eddies that the man in the video was taller or shorter than his friend here you're said when the FBI guys came in. I wanted to be able to tell It wasn't Eddie once I did this, it was like well, it is Eddie six days after the video was made public, the Department of Commerce, investigation received a tip. The purchaser was Eddie Tipton Investigators visited Eddie Tipton at his office at the Maldives,
date, Lottery Association, where he told them that, on the day, the lottery ticket was Just he wasn't even in the state of Iowa, he said, he'd been vis. Family in Texas: they subpoenaed his phone records and bank statements, which showed that his story was not quite true, he'd been into Moyne. At the time the ticket was purchased, also looked at ease, Linkedin profile and saw familiar name. He'd been doors by a man named Robert roads investigators had her, disdain before from Philip Johnston. The man who claim to represent the winning ticket hole back in two thousand. Eleven Eddie Tipton was arrested and charged with two Phelan accounts of fraud. Malta state Lottery Association employees are ineligible to play. The lottery and not only did Eddie Tipton work for the lottery. He also rights the programme that actually picks
the supposedly random numbers the people want to hit when they're trying to hit the Jap even ass. He prepared for trial. Rob sand didn't know how exactly Eddie Tipton had rigged the numbers he offered Eddie Tipton a plea deal if he would tell investigators how we pulled it off, but Eddie Tipton refuse to talk and the trial began. In July, two thousand fifteen. The day we started presenting evidence, CBS News, morning did a nation wide broadcast calling into question. Whether we had enough evidence to prove the case, Rob Sand argued that the jury didn't need to understand, How Eddie had chosen the winning numbers? They just needed to recognise the incredible coincidence of the head of eighty six. Ready for the Multi State, Lottery Association, picking the winning numbers, but the odds,
and more than ten million to one and that a man who had access to everything involved in picking the numbers just happened to get the right ones. He wrote the code that produced the winning where's. He had direct contact with the random number generating machines he had to have tampered with the process, somehow and tried to get around lottery rules when he wanted to claim the prize. I wasn't sure if the jury would understand our case, but that, but he had rigged it did Council kept saying you know this is just he wants you to imagine this stuff. He can't explaining how it works. He just wants you to say that it happen. Any Tipton was found guilty of both counter fraud
one for attempting to fraudulently clean a winning lottery ticket and the other four manipulating lottery equipment. In order to ensure his win, we got one the first count, because the evidence is pretty clear, an inescapable and we're gonna second count, because at the end of the day, when you look around all this mountain of circumstantial evidence, this man's job is to write the programme, the pixel winning numbers these in the drawing room that he had access to these machines in his office constantly and could have at any point installed different software. It was just sort of this inescapable conclusion. Rob sand tried again to offer Eddie tipped an ideal this time, a reduced sentence if you'd explain how he pulled it off again and he refused to tell how we
done it or even admit that he'd rigged the system at all Rob sand thought. It was interesting that even after it already been found guilty, Eddie Tipton wouldn't go for reduced sentence, and then he got a phone call pick up the phone. Some guy says this Rob sand We all know lady Tippins brother, one water about ten years ago, where somewhere may be cholera, we'll be right back Support for criminal comes from better help online counselling, if you're having trouble, meeting your goals or trouble sleeping where you're feeling Strasbourg oppressed better help is
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and zip recruited outcome, Slash Criminal, that supercool dot com, Slash c R. I am, I am out: Eddie Tipton was convicted of two Council felony fraud in two thousand fifteen and sentence to ten years in prison. His Malta stated Battery association, coworker an old friend Ed's to Fawn, says he couldn't believe it, the known each other. For thirty years they met in a calculus class at the University of Houston and it state close Eddie was Enneads wedding and in the early two thousands when Ed needed to hire someone to run the Idee department. At the multi statement, Rizzo station. He recommended Eddie for the job, so you you're, the guy. You got him hired, you did anything in him lead you to believe This was an inside job that he might be involved.
Definitely not! No. There was no, no, no idea of that's possibility, one way or the other, no idea that that that was even on the table of a possibility. Quite frankly, there is no reason to believe in here oh that hit, you ve noticed over the years that. Eddie seem to have a life style. Things cars homes that We didn't really match up with the salary that you knew he was making yes absolutely the wrong for Eddie an eye for an eye were tight, so he and I actually bought together a fifty ash, acre parcel of land and we split it, and so he was building his house. I was building my house or houses workers
on adjoining land and so eddies overhear building this MC mansion. I mean this house's incredible. I mean solidly astounding seven thousand square feet to basements racquetball court. All the stuff like Eddie did like. I know what you make like. How are you assistant attorney General Rob Sand was asking the same question when he learned that any tipped his brother Tom. Captain had won the lottery in Colorado back in two thousand five. He started making calls and learned that Tommy Tipton had been investigated by Texas FBI agent named Richard Rynason and Richard Edison told Rob sand that after one, the lottery, Tommy Tipton went to a fireworks dealer and tried to launder five hundred thousand dollars Tommy to have been a just. Peace in Texas has like half a million dollars of consecutively marked bills and, of course, this
makes the fireworks dealer suspicious. The fireworks dealer went to the FBI and the F B. I question Tommy he told agent medicine that he was laundering the money, because you didn't want his wife to know he'd want it. He said. Even gone so far as to ask a friend to claim the prize on his behalf. It was all a little strange, but it was all legal because the case previously. Well, that's weird. I fully understand why you do what you do and but for somebody laundering money. That money has to be dirty, and if you want this in the lottery than its not dirty money, then they closed their case. Still, Rob sand wondered why eddies brother had behaved so strangely and why Eddie still wouldn't tell him how we managed to get the winning numbers in Iowa plus two winner, in the same family was just too much.
Thought. It was suspicious enough to make calls to all the other state lotteries and the country instead of em, hey We have a very real reason to believe that. This wasn't isolated in Iowa and we need a lot of your data about your lottery. Winners are of the country, they started. Looking at a list of names of winners, searching for connections to the Tipton Brothers the learned that in two thousand seven a winning lottery ticket, had been purchased in Wisconsin. By a man named Robert Roads, a name they knew from Eddie Tipton linked in he'd, been the link between Philip Johnston and Eddy Tipton Robert roads is winning ticket numbers were drawn under for twenty ninth, two thousand seven Eddie Tipton winning ticket numbers.
Were drawn on December. Twenty ninth, two thousand ten and then Robson discovered in Oklahoma Lottery winner named Kyle. Con com is the last name, she'll n n, which is just too rich. So let's ask Oklahoma for that claim file. So we go back to Oklahoma. We say hey. We want this file related to this Kyle com. Who claim this ticket here they say all right here you go, and I remember him sitting in my home. This is around the holidays sitting in my parents living room, just pull up the phone number that is in the Kyle conclave, form and running that phone number through Eddie in Tommy's years upon years of phone records in boom. There's a hit so
I'm point. We know. Tommy Tipton had a phone call with Kyle Car hire cons, winning ticket numbers, Redrawn November, twenty three two thousand eleven Tommy tipped winning numbers in Colorado were drawn. November twenty third, two thousand five votes sand also discovered to jackpots in Kansas, There have been one on the same day and same here as Eddie Tipton Diabetic and the people who claimed those prizes were both contacts in eddies phone. One of them Fact she never had met on a dating website and they got a date or two didn't work out, but estate friends, and then she got engaged He presented this as engagement gift. But it wasn't until January two thousand. Sixteen that rob sand actually figured out what Eddie Tipton was doing.
I was sent on my desk and David MOSS from from Wisconsin Ages office. Calls me he says: hey rob me at your computer. I said yeah says check your email, I checked my email open up an email from him open up a pdf attached to it in I done a very small amount of HTML code in when I was in, school and I was instantly able to recognise what I was looking at. What I was looking out was the code that any had written Who make these allegedly random numbers we actually predictable to him. Number I said David, you guys here that is the Holly Icarus explain in my head right now: Eddie had written a code that would dramatically decrease,
the number of possible winning combinations to a smaller set of numbers that Eddie could go play. He designed his coat to work within specific narrow circumstances, wednesdays or Saturday evenings only three days of the year may twenty seventh November, twenty third and December twenty nine budding writer, against Memorial Day, Thanksgiving and Christmas. Very convenient times for Eddie Tipton to be out of the office. Buying lottery tickets Rob sanded investigators presented Eddie captain with the new evidence against him, including the fact that Robert roads was now working. Witness for the prosecution they asked once again to tell them how we did it, and this time he agreed The end of the story that he tells in an interview was that he didn't necessarily set out to start
largest lottery rigging scheme in american history, but that he sort I saw that he could do it in once. You saw he could do it. He decided to see a few cotton from having done that, once he decided No it again, although it was a way to help friends, his friend Robert roads was struggling, and dim. Frankly, what a lot of white collar criminals do rationalize. The reasons why the stuff, if they were doing, wasn't, really that big a deal after all in the end, Eddie Tipton, along with his brother, Tommy, admitted defrauding states out of more than twenty four million dollars. I look at financial crime and I see people who are in a position of some privilege in life right typically they're able to commit financial crime because they have access to money.
So that removes desperation from one of their motivators. Financial crimes are people who are in a good position in life who are abusing choosing to abuse their position over and over and over again, typically So when you talk to me about financial crime, what I hear is someone who is greedy, whose crimes or crimes of selfishness whose crimes so that people in and frankly, who thinks there smart enough to get away with it rob sand. Has carbon crimes against gratitude? Eddie Tipton is currently serving a twenty five year sentence at clearing. The correction of facility in Ireland
Tommy Tipton went to prison for seventy five days. What about all the other guys that were involved in this Crawford Shaw, Philip Johnston, what happened to them? Philip Johnston entered a cooperation agreement with the state. Iowa. There isn't really any reason to think that he actually knows the bigger truth or new, the bigger truth of what was going on at the time that we made the claim, same goes for Crawford Shaw. I think they certainly could have asked more questions of their clients if they wanted to, but they were asserting claims on behalf of a client and they wouldn't be a good basis to charge them and in in the whole scheme of things, tat being Eddie Tipton differ survive.
Money that that these guys that Eddie Tipton one for himself what happened all the money lot of those cash alot of it was spent a lot of it. He put into his house here- and I were a lot of it- and paying back to their attorneys here and I were, but they also agreed to pay restitution. So every penny, stolen from a lottery ticket is again it upon between the two Tipton Brothers and Robert roads to get repaid, and they ve also agreed not to fight legal proceedings in order to seize land in Texas that they ought to get those debts paid do pray the lottery. Now you ve never print. I think I've problem, but a few I wouldn't say, play at them. Well, you ve got me thinking at the lottery again, maybe I'll just for the health of its time, then get myself a ticket and and think maybe I'm lucky
criminally screen. By Lorn Spore and me the Wilson is our senior producer since then Robertson is our producer audio makes by raw buyers. Julian Alexander mix original illustrations preach episode of criminal. You can see them at this is criminal dot com were in Facebook and Twitter add criminal show. Criminal is recorded in the studio of North Carolina public Radio, w you, see we're a proud member of Radio Tokyo from pure acts, a collection of the best podcast around I'm be judge. This is criminal. radio do.
Transcript generated on 2021-03-30.