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Lottery Scam Probe Involves Tennessee

Posted: 9:00 PM, May 10, 2016
Updated: 2016-05-11 17:28:34-04

The Tennessee Education Lottery is cooperating with investigators as they look into one of the most elaborate lottery scams in U.S. history.

The scam was the mastermind of Eddie Tipton, a former security director with the Multi-State Lottery Association.

Tipton has been convicted of fraud and sentenced to 10 years in prison.

But his brother and his old college roommate were recently arrested as the jackpot fixing investigation expanded.

Prosecutors in Iowa say surveillance video from an Iowa convenience store shows Eddie Tipton buying a winning ticket worth $14 million back in 2010.

The assistant director of Iowa's Division of Criminal Investigation (DCI) said the scam sounds like something you would see in a movie.

"This new to me in my career. I have not seen anything like this," David Jobes said.

Investigators say Tipton used his security clearance to install software on lottery computers.

The software enabled him to manipulate winning lottery numbers in at least six states.

"We continue to work on this case. The agents keep looking at jackpots in different locations," Jobe said.

That includes Tennessee.

The president and CEO of the Tennessee Education Lottery, Rebecca Hargrove, confirmed they provided the names of those who won certain lottery games to investigators.

They are reviewing those names to see if winners have ties to Tipton.

"We feel as confident as we possibly can that Tennessee was not impacted," Hargrove said.

But Tennessee lottery officials confirmed to Newschannel 5 Investigates that Tipton visited the offices of the Tennessee Lottery back in 2004 while he worked for the Multi-State Lottery Association.

"He had no access what-so-ever to our facilities since we started using random number generated drawings," Hargrove said.

Investigators are not focused on games like Mega-millions or Powerball because they use ball drops to pick winning numbers.

They are focused on games like Hot Lotto which use computers - called random number generators to pick winners.

Tipton's brother actually won jackpots in Oklahoma and Colorado. An investigator was asked could anyone be that lucky?

David Jobe responded, "I wouldn't think so. I know I'm not."

Hargrove said the timing is critical -- the state didn't start using Hot Lotto until 2013 -- after Tipton had been caught buying that ticket in Iowa and his scheme began to unravel.

She doubts Tennessee will be impacted by the lottery scam.

NewsChannel 5 Investigates asked, " How can you say that?"

Hargrove responded, "Because we didn't use any random number generators from the gentleman who provided them. Our random number generators have never come from that source."