Ex-worker accused of rigging lottery pleads guilty to theft

MADISON -- (WITI) -- A lottery computer programmer charged with using his inside knowledge to win rigged games across the U.S. pleaded guilty Monday to fixing a 2007 jackpot in Wisconsin — his first admission of guilt in a scandal that rocked the industry.

Eddie Tipton entered the guilty plea to one count of theft and one count of a computer crime in a courtroom in Madison, after insisting on his innocence since his arrest in 2015. Prosecutors dismissed a racketeering count and three other computer crime charges in exchange. He's set to be sentenced on Sept. 21.

Tipton spoke only to say he understood when Dane County Circuit Judge Ellen Berz asked him if knew he was waiving his right to a trial.

Tipton faces additional charges in Iowa. Wisconsin Assistant Attorney General David Maas told Berz that Tipton plans to enter a plea in that state later this month.

Tipton and his Wisconsin attorney, John Bradley, declined comment outside the courtroom. His attorney in Iowa, Dean Stowers, said he believed the case in that state would soon get resolved but no plea deal has been finalized.

Tipton was security director for the Multi-State Lottery Association, where he wrote and installed code for software that picked random numbers for games sold by member lotteries.

Investigators say Tipton designed his software so that on three days out of the year, he could predict the winning numbers. Tipton; his best friend, Texas businessman Robert Rhodes; and his brother, former Texas Judge Tommy Tipton, then bought winning numbers for those drawings and split the jackpots, authorities say.

Prosecutors say the trio has been linked to winning tickets worth millions between 2005 and 2011 in Colorado, Wisconsin, Iowa, Kansas and Oklahoma. The alleged scheme unraveled after Tipton was caught on surveillance video buying a winning $16 million Hot Lotto ticket in December 2010 in Iowa that others would unsuccessfully try to cash a year later.

Tipton's guilty plea in Wisconsin came after Rhodes told investigators there in detail how the scheme worked for a $783,000 Megabucks jackpot they won on Dec. 29, 2007. Rhodes pleaded guilty earlier this year to his role and pledged to testify against Tipton in Wisconsin and Iowa under plea agreements.

Rhodes told investigators that he visited Tipton at his Iowa home in December 2007. Tipton gave him index cards containing a series of numbers for him to play for the upcoming drawing. Rhodes drove to Wisconsin in a rental car, buying tickets from various stores in the southwestern part of the state, before driving back to Iowa and returning to Texas. Rhodes then used a limited liability company to claim the prize in Wisconsin.

An earlier break in the case came in Wisconsin, where investigators were able to recover an old computer used for the drawing that still had Tipton's code on it. The program code was later discovered on lottery computers in Indiana and Arkansas but apparently hadn't been used in those states.

After his arrest, the Multi-State Lottery Association fired Tipton and later forced out its founder and longtime leader over the scandal. The association and state lotteries say they have taken a number of steps to prevent insider fraud in the future. Meanwhile, the association faces at least two lawsuits by players who claim they were cheated by Tipton's rigging.

“We're glad he's decided to take responsibility for his actions and we hope the Multi-State Lottery Association follows suit,” said Des Moines attorney Nicholas Mauro, who's representing plaintiffs in two cases.