Investigators were suspicious in 2006 when they heard that a rural Texas judge was trying to exchange $450,000 in consecutively marked bills.
But Tommy Tipton, a Fayette County magistrate, told the FBI that his actions were innocent, if odd: He won the Colorado lottery but couldn’t tell his wife because gambling was against their Christian faith. The FBI accepted the story and dropped its inquiry of Tipton, who soon bought a new truck and more property around the town of Flatonia, 110 miles (180 kilometers) west of Houston.
A decade later, the inquiry stands out as a missed chance to stop a jackpot rigging scandal that would corrupt the $70 billion lottery industry for years while enriching a tiny group of insiders. The FBI didn’t uncover one fact that its informant knew but didn’t see as significant: that Tipton’s brother, Eddie Tipton, was a lottery industry employee. In fact, he’d built the machine that picked the winning combination for the Colorado Lotto game.
“I didn’t add two and two together,” said the informant, Tom Bargas, owner of Mr. B Fireworks in Schulenburg, Texas. “I don’t think I mentioned it to the FBI. Had I, they probably would have been smart enough to know then. It was a missed opportunity. It should have been stopped immediately.”
Bargas recalled a conversation months earlier in his warehouse in which someone joked to Eddie Tipton that he could use his job at the Multi-State Lottery Association in Urbandale, Iowa, to “rig up the lottery.”
“He just laughed about it,” Bargas told The Associated Press. “We didn’t realize that he was actually thinking about doing it or had done it already.”