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Mystery Lottery Case Delayed, Lotteries Heighten Security

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DES MOINES, Iowa (AP) — The fraud trial for a former lottery worker accused of fixing the Hot Lotto game in an attempt to win a $14 million jackpot was delayed Monday, but officials said the case has prompted them to heighten security.

Eddie Tipton, 51, of Norwalk faces two counts of fraud for allegedly altering the program of a random-number generating computer used for the Hot Lotto game in 2010.

Tipton's trial was scheduled to begin Monday but his defense attorney sought a delay just before jury selection began and a judge reset the trial for July 13.

Tipton was the director of information security at the Urbandale-based Multi-State Lottery Association when prosecutors contend he bought a ticket on Dec. 23, 2010, at a Des Moines area convenience store. He picked his own numbers that six days later won the jackpot.

He's accused of devising an elaborate scheme involving a New York attorney and acquaintances in Texas to try to collect the prize. As an employee of the lottery association, an Iowa Lottery vendor, Tipton was prohibited by Iowa law from playing the lottery.

Tipton had worked for the lottery association since 2003. As information security director he had access to the secure room housing the random-number generating computer.

The Multi-State Lottery Association is a nonprofit owned and operated by 37 member lotteries, mostly state-run lotteries including Iowa. The organization manages game finances, security standards and the operation of the random number generator that picks numbers for several games including Hot Lotto.

Prosecutors allege Tipton was in the secure computer room on Nov. 20, 2010. They claim he used a program called a root kit capable of altering a computer's program, then deleting itself so it's untraceable. Tipton denies he altered the number generator and said he didn't buy the ticket.

Defense lawyer Dean Stowers said prosecutors notified him on Friday of new evidence and their plans to call witnesses to testify about Tipton's presence in the computer room. Stowers complained the new material left him with too little time to prepare for trial.

Assistant Iowa Attorney General Rob Sand, who is prosecuting the case, said the investigation into the case continues to evolve and new information is surfacing.

Much of the disputed evidence prosecutors presented days before trial involved a videotape which shows Tipton in the secure room with the computer that generates the numbers.

The Hot Lotto jackpot was unclaimed for nearly a year until New York attorney Crawford Shaw surfaced to claim the money on behalf of undisclosed partners in an investment trust incorporated in Belize. State law prohibits the Iowa Lottery from releasing winnings to anonymous recipients.

Shaw withdrew his claim in 2012. Iowa Lottery officials asked the Iowa Division of Criminal Investigation to look into the ticket purchase and claim.

The investigation also led to fraud charges against Robert Clark Rhodes II, of Sugar Land, Texas, a previous co-worker of Tipton. Rhodes was arrested in March and is expected to be transferred to Iowa for trial.

On Monday, officials said the case has prompted security changes by the Multi-State Lottery Association, including replacing equipment and software used in Hot Lotto drawings, updating security cameras and changing security procedures.

Iowa Lottery CEO Terry Rich said, "I have confidence that the games we offer today are fair."

(©2015 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)


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