In one of the most elaborate lottery scams in history, a man with inside access managed to rig lottery numbers, earning it the title of a “21st-century inside job.” Prosecutors revealed how he manipulated the lottery’s random number generator, allowing him to predict the winning numbers. This case spanned Iowa, Colorado, and Wisconsin, uncovering a triangle of lottery fraud across America’s heartland.
The Final Gamble: A Mastermind’s Last Move
In a surveillance video, the mastermind of this multimillion-dollar scheme was seen taking what prosecutors called his “final gamble.” This individual had hacked into computers and installed sophisticated malware designed to disappear without a trace. Despite the intrigue, it appeared that the person behind the Hot Lotto jackpot had simply walked away from millions.
From the outset, this was one of the strangest cases in lottery history, blending technology, fraud, and a web of legal ambiguity. It serves as a stark reminder of the risks of digital manipulation—not just in lotteries, but also in everyday digital life.
How the Scam Unfolded
On December 29, 2010, in Iowa, the Hot Lotto jackpot reached a staggering $16.5 million. The Iowa Lottery confirmed that someone had won but couldn’t locate the winner, despite multiple calls from claimants. The missing link? None of the callers had the 15-digit serial number from the winning ticket.
Almost a year later, on November 9, 2011, a lawyer named Philip Johnston contacted the Iowa Lottery, providing the winning serial number. Everything seemed to be in order until Johnston was asked about his attire when purchasing the ticket. His answer—a sports coat and dress pants—didn’t match the CCTV footage, which showed a man in a dark hoodie and jeans.
Johnston quickly admitted that he wasn’t the actual winner but was representing a client who wished to remain anonymous. The lottery, however, required the real ticket buyer to go public. In frustration, Johnston threatened to withdraw the claim and hung up.
A Suspicious Claim Raises Red Flags
Weeks later, on December 29, 2011, just two hours before the ticket would expire, two lawyers appeared at the Iowa Lottery headquarters, claiming to represent a mysterious trust in Belize. The trust, they said, was the rightful winner of the $16.5 million prize. But the convoluted legal structure raised concerns. Why go through so many layers of secrecy for a lottery payout?
The Iowa Lottery refused to pay out and handed the case over to the authorities. The investigation, led by local law enforcement and the FBI, stalled for years until 2014, when the police released CCTV footage of the mysterious ticket buyer.
The Identity of the Culprit: Eddie Tipton
A breakthrough came when Jason Maher, a lottery employee, recognized the man in the video as Eddie Tipton, the Iowa Lottery’s Information Security Director. Tipton, responsible for the security of the lottery’s systems, was legally prohibited from participating in the lottery. Yet, somehow, he had access to the winning ticket.
Investigators discovered that Tipton had tampered with the lottery’s random number generator. Although these machines were supposed to be secure, Tipton had accessed the room on November 20, 2010, under the pretext of adjusting the computer for daylight savings. Coincidentally, the surveillance cameras experienced a “glitch” that day, capturing only one second of footage per minute.
The Hacking Scheme and Its Unraveling
Tipton was a known enthusiast of rootkits—malware that can infiltrate systems undetected. Using a self-destructing rootkit, Tipton manipulated the number generator during his brief access, setting the stage for his $16.5 million win.
But Tipton didn’t act alone. His best friend, Robert Rhodes, hired Philip Johnston to create a web of offshore companies to claim the prize without raising suspicion. Rhodes was eventually arrested and confessed to the scheme, revealing that this wasn’t their first fraudulent win.
A History of Lottery Manipulation
The investigation revealed that Tipton had rigged multiple lottery draws over several years. In 2005, Tipton’s brother won $560,000 in the Colorado Lottery using a ticket from a machine Tipton helped program. In 2007, an LLC linked to Rhodes cashed in a $780,000 lottery win in Wisconsin. Another suspicious win for $1.2 million was tied to a man believed to be a family member or close friend of Tipton.
Though the malware Tipton used wasn’t particularly sophisticated, the trust placed in him as an IT director allowed him to operate undetected for years. Ultimately, it was Tipton’s greed that led to his downfall.
The Endgame
In 2015, Eddie Tipton was arrested and confessed to his role in rigging the lotteries. He was sentenced to 25 years in prison and ordered to repay $2 million. His case serves as a cautionary tale about the dangers of insider access and the vulnerabilities even in supposedly secure systems.
The story of Eddie Tipton is one of the most bizarre hacking schemes in U.S. history—a blend of technology, trust, and a lottery jackpot too tempting to resist.
