What had started with one suspect in Iowa had spread to Texas, and a Sugar Land tech consultant and divorced father of three named Robert Clark Rhodes II. Iowa authorities thought they had finally connected Rhodes to their No. 1 man: Eddie Tipton, who they believed bought a winning $16.5 million Hot Lotto ticket five years earlier — a ticket that was a winner only because he knew the jackpot five-number sequence ahead of time, which helpfully reduced the 29 million-to-one odds.
Tipton knew the winning numbers because he was able to rig them: He was the security director for the Multi-State Lottery Association, a nonprofit organization made up of lottery departments in 37 states. The association provides the software, equipment and technological wizardry behind multimillion-dollar jackpots. Tipton had access to the nerve center behind the 16-state Hot Lotto game: two computers housed in the glass-walled chamber of an otherwise bland, beige-brick shoebox of a building next door to a giant Goodwill store in Urbandale, Iowa.
The computers in the ostensibly hyper-secure sanctum known as the “draw room” are under 24-hour video surveillance, are not connected to the Internet and can be accessed by only a handful of people. For 11 years, Tipton was one of them.
Like his best friend, Rhodes had tremendous lottery luck as well. In 2007 he won $738,000 in a Wisconsin Megabucks game. It would take four years, but Iowa authorities would discover that Rhodes also held the ultimately cursed Hot Lotto ticket.
In September 2015, Tipton was convicted on two counts of fraud and sentenced to ten years in prison, but one of the counts was dismissed on appeal — Tipton successfully argued that the charge was filed after the statute of limitations had expired. But last year, Iowa prosecutors filed more fraud-related charges against Tipton. And those are still pending.
The investigation also revealed that the jackpot-fixing involved more people than Tipton, and more states than Iowa.
Tipton, like other association employees, was prohibited from participating in lotteries. But since 2005, Tipton’s friends and family had a remarkable run of luck against the odds in Colorado, Wisconsin, Kansas and Oklahoma.
The plot to redeem that ticket — an inevitably doomed scheme that was as intricate as it was idiotic — sparked an investigation that blew the lid off a multi-state lottery rigging scheme that led to convictions for Tipton and Rhodes, as well as additional pending charges for Tipton and others. It also led to other states’ lottery departments suddenly realizing that they, too, had been hit by the Tipton-Rhodes gang. The association is also facing lawsuits filed by bitter lottery players who say their chances of hitting the jackpot were squelched by the association’s lax security.
After Tipton was charged in January 2015, the friends’ conversations took on a more paranoid tone. Fearing that agents might have tapped their phones, Tipton preferred to talk shop in person, as in the parking lots of gyro joints.
But even before then, Rhodes would say in a deposition, they’d get together and have heart-to-hearts about their lottery winnings. After Rhodes collected the Wisconsin payout, Tipton would drive down from Iowa to collect his share, which Rhodes always gave him in cash — $35,000 or $50,000 at a time, bundles of hundred-dollar bills in a hard-sided briefcase, almost like in the movies, except the stacks were never as fat. It was kind of disappointing. They’d sit on patio chairs under the shade of a tree in Rhodes’s backyard, and Tipton would sometimes get pangs of guilt and ask his friend if he’d done something wrong.
“And for my own selfish reasons, I always told him no,” Rhodes said.
By the end of 2015, Rhodes would have his own guilty feelings — and not just because he got caught. He had started to talk with authorities, who were offering leniency in exchange for Rhodes’s testimony against Tipton and others.
That testimony is expected to be used in trials that are still pending for Tipton and his brother. But in securing that testimony, agents had to solve the most ballsy, brazen and ultimately ridiculous lottery-rigging mystery ever — a convoluted mess involving shady offshore tax shelters, the Royal Canadian Mounted Police, a bigfoot hunter and, ultimately, a best friend’s betrayal.