Lottery winner can sue over Tipton-rigged lottery rollover

Lottery fraudster Eddie Tipton fixed the draw the week before “Lucky” Larry Dawson won it, but should Dawson be entitled to a $16.5 million rollover that didn’t happen? (Image: Charlie Neibergal/AP)

A nine-million-dollar Iowa lottery winner is free to sue the Multi-State Lottery Association (MSLA), a district court judge has ruled. “Lucky” Larry Dawson won the Hot Lotto jackpot in May 2011.

Good for Larry, you say, but why the litigation? Well, Lucky Larry won the jackpot the week after notorious lottery fraudster Eddie Tipton, and Larry says without Tipton’s meddling the jackpot would have rolled over, netting him another $16.5 million.

Insider Scam

Tipton was the director of information security at the MSLA. Last year, he was sentenced to ten years in prison for rigging the disputed contest, and others.

Prosecutors proved that Tipton installed a self-destructing hack program to ensure the random number generator used in the draw picked his numbers.

He also tampered with surveillance cameras so his installation of the software went undetected. Tipton and a small network of friends and family claimed at least six jackpots in five different states between 2005 and 2011.  

Investigators who examined a random number generator tampered with by Tipton found the device contained two extra bits of coding that directed it to produce predictable numbers on three days of the year.

Tipton was ultimately caught after authorities became suspicious when the “winner” of the $16.5 million draw, a week prior to Dawson’s win, failed to claim the prize in person.

In October 2014, authorities released surveillance footage of a man purchasing the ticket from a Des Moines convenience store, who was subsequently identified by lottery colleagues as Eddie Tipton.

Phantom Rollover

Judge Karen Romano rejected requests by the MSLA to dismiss Dawson’s case. The filing argues that the association’s lax security measures allowed Tipton to operate undetected for years and that, under MSLA’s own rules, the jackpot should have rolled over because there was “no legitimate winner.” Instead, the organization redistributed the money back to the 16 state lotteries that offered the game.

“Lottery players across the country, including Iowans, were defrauded as a result of rigged lottery games,” said Dawson’s attorneys, Jerry Crawford and Nick Mauro, who added they were pleased with the judge’s ruling and were look forward to proceeding with the case.

“This ruling allows us to focus on learning why and how the Iowa Lottery and (the association) allowed this to occur. More important, it provides the opportunity to hold them accountable for their conduct.”