DES MOINES — Admitted lottery fraudster Eddie Tipton expressed regret and sorrow Tuesday for his lead role in rigging drawings, but a district judge turned a deaf ear to his attorney’s call for leniency in sentencing him to serve up to 25 years in prison for pleading guilty to a felony count of ongoing criminal conduct.
District Judge Bradley McCall gave Tipton the maximum penalty allowed under Iowa’s indeterminate sentencing system, telling him he was a “very intelligent and gifted man” who chose an illegal path largely out of greed.
After the hearing, Tipton’s attorney, Dean Stowers, told reporters he did not plan to appeal the sentence, apparently bringing to an end a bizarre case that came to light after a Hot Lotto drawing in 2010.
“When you’re an insider who abuses your position of trust, you should expect to see the inside of a jail cell. We’re glad the court agreed and found it appropriate to send Mr. Tipton to prison,” said prosecutor Rob Sand, an assistant Iowa Attorney General.
Sand asked the judge to order the Iowa sentence be served concurrently with the term Tipton is handed next month in Wisconsin, stemming from a guilty plea there to felony charges he rigged a lottery in 2007.
Stowers expected Tipton would be ordered to serve between three and four years in prison under Wisconsin’s sentencing framework.
Tipton, 54, a former information security director for the Multi-State Lottery Association — an Urbandale nonprofit that distributes lottery games nationwide — also was ordered to pay $2.2 million in restitution for being the mastermind behind a scheme that spanned five states.
During a June court appearance, Tipton admitted he tampered with what were supposed to be random number generators to enable his co-conspirators to claim jackpots in Colorado, Oklahoma, Wisconsin and Kansas. It was Tipton’s job to write software that is supposed to randomly pick numbers for lottery computers used for various games by 37 states and territorial lotteries.
The criminal activity unraveled when Iowa Lottery officials became suspicious over a mysterious attempt to claim a $14.3 million Hot Lotto prize in 2010 that was never paid out but that led authorities to Tipton, who as a lottery official was not allowed to play.
While working for the Urbandale association, Tipton said he wrote a software code about 10 years ago that would predict winning numbers. He shared those numbers with others who used them to win jackpots, and they in turn shared their winnings with him.
Investigators linked Tipton, his brother, Tommy, and a longtime friend, Robert Rhodes, to suspicious jackpots in four states.
“I certainly regret my actions. It’s difficult saying that with all the people behind me that I’ve hurt,” Tipton told the judge. “I regret it and I’m sorry.”
McCall said he considered a number of factors in sentencing Tipton, telling the defendant to “get rid” of his greed and “get a little common sense” in the future.
Stowers, who asked the judge to consider a suspended sentence, said he was disappointed by the outcome given that the Iowa Supreme Court had overturned his client’s previous theft conviction. He said the Iowa prosecution represented double jeopardy and should be barred by the statute of limitations.
Tipton’s guilty plea ultimately was part of a multistate arrangement resulting from alleged criminal activities outside Iowa and, Stowers argued, his client was being treated disproportionally in Iowa.
The “Wisconsin case became the dog and Iowa became the tail. Now what Iowa wants is for the tail to wag the dog,” Stowers told McCall.
However, the judge noted Tipton had waived some of his defense arguments when he entered his guilty pleas.
Sand said he believed the concurrent sentence was appropriate given that Tipton had provided prosecutors with information that will be beneficial for securing lottery systems in the future. But he also noted Tipton continued to minimize what he had done, which required a clear message from the court.
Tipton’s brother, Tommy, 53, of Flatonia, Texas, entered guilty pleas to two criminal counts as part of a multistate plea agreement and was placed on probation and sentenced to serve 75 days in a Texas jail. Overall, the Tipton brothers were ordered to pay about $3 million in restitution and Tommy Tipton also was told to pay Iowa more than $5,300 in fines.
Rhodes, 49, of Sugar Land, Texas, previously pleaded guilty in Iowa to a felony charge and agreed to cooperate. He has not been sentenced.
“We appreciate the work of the judge and respect the court’s decision. This moment has been years coming, and provides closure and certainty after all this time,” said Iowa Lottery Chief Executive Officer Terry Rich, who attended Tuesday’s sentencing.
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