Posted on 03/22/2015 3:41:09 AM PDT by jjotto
DES MOINES — Authorities made a second arrest in the Hot Lotto ticket investigation Thursday night.
The Iowa Department of Public Safety’s Division of Criminal Investigation and the Iowa Attorney General’s Office have charged Robert Clark Rhodes II, 46, of Sugarland, Texas, with two counts of fraud, according to a release from DPS. Both counts of fraud are Class D felonies.
Iowa authorities arrested Rhodes in Texas March 20 with the help of Texas Lottery Enforcement officials, according to the release. He is being held on a $500,000 cash-only bond in the Fort Bend County Jail where he will await extradition proceedings to bring him back to Iowa.
The three-year investigation into the purchase of a winning Hot Lotto ticket that was claimed, and then later forfeited, is ongoing. The first arrest in the investigation was made in January.
Original story:
Story Updated: Jan 15, 2015 at 6:41 PM CDT
DES MOINES — A Norwalk man was arrested Thursday afternoon and charged with two felonies as a result of a three-year investigation into the purchase of a winning Hot Lotto ticket that was claimed, but then forfeited.
Eddie Raymond Tipton, 51, of Norwalk was arrested by Division of Criminal Investigation agents and charged by the Attorney General’s Office with two counts of fraud, Class D felonies, punishable by up to five years in prison.
Tipton is accused of “attempting to influence the winning of a prize through the use of fraud or deception” and with “the intent to attempt to defraud, attempted to falsely utter, pass or redeem a lottery ticket” in violation of Iowa law, according to a complaint filed in Polk County by Assistant Attorney General Robert Sand.
Tipton, according to the Iowa Lottery, worked as the director of security for the Multi-State Lottery, which runs Hot Lotto. As an employee of a lottery vendor, he was prohibited by law from playing Iowa Lottery games.
“This is truly one of the strangest situations in the history of lotteries,” Iowa Lottery CEO Terry Rich said at a Des Moines news conference Thursday. “We believe this is the largest lottery jackpot ever to be claimed, only to have that claim later withdrawn.”
The mystery dates back to December 2010 when Tipton allegedly bought the winning Hot Lotto ticket with a face value of $16.5 million at a Quik Trip on Des Moines’ near north side, according to DCI Assistant Director Dave Jobes.
In November 2011, the Lottery was contacted by Phillip Johnston, a Canadian who claimed to be the winner. Although he had the 15-digit security number, there were discrepancies in his story, such as his description of the purchaser’s clothing.
He later advised the Lottery he was not the ticket owner, but was representing an anonymous party.
Investigators went to Quebec City, Canada, where Johnston said two men in Houston who he had worked with asked for help in claiming the winning ticket. One of those men had a 30-year professional relationship with New York attorney Crawford Shaw, according to the DCI. He sent the ticket to Shaw, who with Johnston’s assistance, prepared the claim.
Less than two hours before the 2011 deadline for claiming the jackpot – worth about $7.5 million after taxes — Shaw came forward to file paperwork with the Iowa Lottery to claim the prize. Shaw said he was acting on behalf of Hexam Investments — a trust based in Belize, which is known as a tax haven.
However, Iowa Lottery officials refused to pay the prize because Shaw’s documentation, without the identity of the purchaser, did not satisfy them the ticket and claim were valid. Shaw withdrew his claim in January 2012 and the prize money was ultimately forfeited.
Facing possible statute of limitations deadline, investigators released surveillance video showing a man purchasing the winning ticket. A tip from someone who watched the video led to Tipton, Jobes said. DCI agents interviewed Tipton in November 2014. Tipton claimed he did not buy the Hot Lotto ticket and claimed to be in Houston when it was bought. Using cell phone records and other information, investigators disproved that claim.
Eventually, investigators established a connection between two men in Houston and Tipton, who earned a degree from the University of Houston.
In December, one of Tipton’s former co-workers said he had seen the video and believed Tipton was the man buying the ticket. Others said the voice on the video sounded like Tipton’s. A friend of Tipton shared his own independent voice analysis that he made to prove the purchaser was not Tipton. However, based on his analysis, he concluded it was Tipton, the DCI said.
Jobes and Rich said they don’t believe Tipton tried to manipulate the lottery game in any way, but was prohibited from playing or winning because he worked as a lottery vendor.
Jobes called the investigation “ongoing and active” with many questions left unanswered.
Let’s the government have a monopoly on gambling because then it will be clean and above board. Wonder how many of these escapades go undetected.
When the free market does it, it’s vice, when the government does it, it’s for the chillin’.
Face value - $16.5 Million After Tax - $7.5 Million. That’s $9 Million in taxes, which is more than 1/2. So how does the government collect the taxes if nobody claims the winnings? Oh, the poor gubmint!
Easy, the take it all (one way or the other)
“A friend of Tipton shared his own independent voice analysis that he made to prove the purchaser was not Tipton. However, based on his analysis, he concluded it was Tipton”
— I wonder if even the journalist knows what he was trying to say.
SAmazing. A convenience store has surveillance tapes from 2+ years ago but our Secret Service claims it lacks White House surveillance tapes from 2 weeks ago.
Sugar Land, Texas
not Sugarland...
Does Iowa not allow Trusts to claim prizes or was Shaw’s trust documentation just missing some info.
If I win the the lottery I am using two trusts. One to claim the prize and a second to funnel the money into it.
Trusts or not, all lotteries have rules about who is eligible to win prizes and under what conditions.
The ticket purchaser has to be identified to verify eligibility. Lottery employees and others connected to it can’t even buy tickets. In places where trusts are allowed, there still has to be a legal acquisition and a legal chain of ownership of the ticket.
Trusts apparently do not dodge any applicable taxes on the initial winnings or annuity.
A trust CAN be used and your name NOT identified if done correctly. That is why I wondered if Shaw didn’t do it correctly or if that state is one where they don’t allow it.
This is why I plan to use TWO trusts if I ever win the lottery. It can be done with no one finding out if you have a smart lawyer and one who doesn’t blab.
Iowa requires a name and address of winner. It CAN potentially be a trust.
http://www.huffingtonpost.com/2012/01/28/iowa-lottery-mystery-_n_1238987.html
Ticket purchaser is made public in Iowa, even if prize is paid into trust. State lotteries have web sites and FAQs, and states can have slightly different rules.
One of mine would be did this guy legitimately have the winning ticket or did he manufacture it?
The lottery employee bought the ticket at a convenience store near the interstate. He drove up in a rented vehicle and wore a hoodie and sunglasses.
He bought two plays with numbers he or his partners picked themselves.
One unanswered question is whether they tampered with the results as insiders or whether they recognized some flaw in the number picking system that rendered the results less than random.
I think the odds that the director of the security firm for the lotto could win a huge jackpot with a random ticket would be greater than the odds for the average citizen.
Yes, if the numbers are drawn at random, how could he have bought a winning ticket. Evidently the winning numbers are known in advance, or the supposed random drawing is anything but....
People who buy government lottery tickets or scratch tickets are complete fools. There’s that old saying, “the lottery is a government tax on people who can’t do math”. How true.
The fact that he pulled up in a rented car and walked in to buy the ticket wearing a hoodie and sunglasses makes it all the more likely that he and his partners cooked something up.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.