Bayou City

A Sugar Land Man Helped Pull Off the Biggest Ever Multi-State Lottery Scam

A Sugar Land Man Helped Pull Off the Biggest Ever Multi-State Lottery Scam
Houston Press
Sometime in 2015 two close friends and former business partners sat in the parking lot of Niko Niko’s Greek restaurant in Montrose, fretting over their roles in the biggest lottery scam in history.

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.

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Rhodes was born in Everett, Washington, but, according to his Twitter page, “moved to Sugar Land #Texas as soon as I could.”

He met Tipton in the early 1990s, when Rhodes was getting his nascent IT company off the ground. Tipton was just the sort of computer whiz Rhodes was looking for. The two University of Houston graduates became fast friends.

With Tipton on board, Stafford-based Systems Evolution blossomed, going public in 2003. That year Tipton left Systems for a security job at the Multi-State Lottery Association in Urbandale, although he was appointed to Systems’ board of directors in 2006, the same year that Rhodes renewed a management agreement with Systems that paid $200,000 a year.

Sometimes, when Rhodes visited Tipton in Iowa, he’d tag along if Tipton had to go into the office. Rhodes testified that he met the association’s then-president, but that he never had any interest in going into the room where they draw the numbers.

If he ever did, he would’ve seen two computers housed in sealed acrylic cases, each with dual locks, with the only keys held by four people, including the draw room manager and an outside auditor. These RNGs — “random-number generators” — were loaded with software, checked by an outside vendor, that spat out thousands of numbered sequences. On “draw” days, when the winning numbers for a jackpot were announced, each computer kicked out a code, and draw managers decided by coin toss which one to choose.

Because the computers weren’t connected to the Internet, their clocks had to be manually adjusted, meaning a manager would have to access the computers without the outside vendor present. Surveillance cameras recorded activity on the computer screens, as well as covered any other activity in the draw room from two different angles.

Access to the computers meant access to high-dollar jackpots from the 37 states that belong to the association. Anyone with that kind of authority had to be trustworthy, which is ostensibly why Tipton’s longtime friend Ed Stefan recommended him for the job.

Tipton and Stefan knew each other from Houston. In 2000, Stefan went to work as the association’s chief information and security officer, and he ultimately recommended Tipton for the job of security director. Stefan would later testify, and tell reporters, that he’d known Tipton his whole life, so he was likely aware that Tipton had a criminal record. (Stefan declined to comment for this story.)

Fort Bend County District Clerk records show that in 1982, when Tipton was 19, he broke into the Rosenberg offices of Pecan Mini-Warehouse and stole more than $1,700 from about a dozen customers, including a local Little League organization.

He was placed on five years’ deferred adjudication and ordered to pay restitution. Although he was able to get out of probation early, he ran into more trouble: In July 1987, he was charged in Harris County District Court with theft of between $20 and $200 and given a suspended sentence of 180 days in jail, plus probation, which terminated in 1988.

Tipton’s new job with the association not only afforded him a six-figure salary and the keys to the Iowa draw room, but access to other states’ draw rooms as well: Tipton wrote the software and built the random-number-generator computers that were purchased by the association’s member states. Tipton and Stefan often delivered and installed the computers themselves, and Tipton also traveled to different states when those computers needed updating or other work.

Tipton’s new job also turned out to be fortuitous for his brother back in Texas.
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In 2006, Tommy Tipton, a justice of the peace in rural Fayette County, about 100 miles west of Houston, had a problem: He had $500,000 in consecutively marked bills, and he needed to switch them out.

Tommy evidently asked the wrong person for help. According to a criminal complaint filed years later, someone alerted authorities — it’s unclear which agency — to the suspicious pile of cash, saying that Tommy had asked this person to help clean the money.

The presence of the cash was arguably the second-weirdest thing about Tommy, who was a member of the Gulf Coast Bigfoot Research Organization, and who had once filed a detailed report on a multiple-sasquatch sighting during an expedition in the forests of northwest Louisiana. Perched in a tree stand, peering through a thermal-imaging camera, Tommy was able to examine the movements of what appeared to be a set of bigfoot parents and their two offspring. “I know what I saw, and there is no doubt in my mind that these animals exist,” he wrote.

Later, when Tommy was facing trial, Assistant Iowa Attorney General Robert Sand would file a motion to bar any mention of the legendary man-beast from the proceedings, admonishing in one of the most awesome legal filings ever that “the prejudicial effect could potentially be as strong as Sasquatch itself.”

More interested in Tommy’s half-million in cash than in cryptozoology, authorities narrowed the focus of their investigation. According to a later court filing, Tommy told authorities he had won $568,990 in the Colorado lottery in November 2005, and that he had a friend claim the winnings for him, because he wanted to hide the loot from his wife — he was planning on divorcing her. At the time, authorities were unaware that Tommy’s brother worked for the lottery association, and just figured that Tommy was one lucky son of a gun.

Soon, Tommy’s good fortune would spread to Robert Rhodes.

According to Rhodes’s later deposition, Eddie Tipton approached Rhodes in October 2007 with an unusual question: What if he knew a jackpot’s winning numbers in advance? Rhodes told his friend he should take advantage of that.

Some years earlier, Tipton had taught Rhodes how to play craps. But now he offered Rhodes a sure-fire way to beat the house. He gave Rhodes sheets of paper containing somewhere between 160 and 400 sets of six-number sequences and said that within those sets was the winner of a Wisconsin Megabucks draw worth $2 million. If a person opted for manual play — picking the numbers himself, instead of allowing a computer to pick — and somehow picked six numbers that matched the winning sequence, that person could claim the whole prize. Rhodes just had to play every set of numbers.

Rhodes flew to Iowa to retrieve the papers, rented a car and then drove to Wisconsin, where he puttered around the southwest portion of the state, buying Megabucks tickets from random stores. Later, after he had flown back to Texas, he checked the Megabucks website and discovered that his friend wasn’t kidding: Rhodes had won the December 29, 2007, drawing. In his claim form, filed in February 2008, Rhodes asked that the money be paid to “Delta S. Holdings, LLC,” which Rhodes had incorporated in Delaware for the express purpose of holding the money.

Tipton told Rhodes that he shouldn’t claim the winnings under his name.

After taxes and other withholdings, the State of Wisconsin paid out $783,000.

In 2010, Tipton approached Rhodes with a plan to hit Megabucks again. Rhodes, worried about tempting fate, reluctantly agreed. Perhaps Tipton was concerned enough about his friend’s nerves that he made other plans in the meantime: Iowa had an upcoming Hot Lotto jackpot worth $16.5 million. There was no way Tipton could pass it up, and he could not afford to trust anyone else with that ticket.

In late December, Tipton gave Rhodes two index cards, with fewer numbers than last time, for the Megabucks. But when Rhodes made it to Wisconsin on December 27, his nerves got the better of him, and he played only a few of the numbers. When the winning sequence was announced two days later, Rhodes discovered it was one of the sequences he hadn’t played.

In January or February 2011, Tipton visited Rhodes, who apologized for not playing the jackpot winner. But Tipton didn’t seem upset. They were still on track for their biggest payday yet. Tipton produced a paperback book, flipped through the pages and pulled out an Iowa Hot Lotto ticket. Now everything was in Rhodes’s hands.
On December 23, 2010, a man doing his conspicuous best to look inconspicuous walked into a QuikTrip convenience store in West Des Moines and bought two Hot Lotto tickets, one of which would lay claim to $16.5 million. He also bought a hot dog.

He was a heavy-set man in a heavy black winter jacket with the hood up, which obscured his face. The clerk who served the customer later told reporters that the man was calm and collected. The man chose the manual play option for both tickets, picking five numbers between 1 and 47 (the unfortunately named “White Balls”) and one additional digit (the even more unfortunately named “Hot Ball”) from 1 through 19.

After the requisite draw-room coin-flip, the winning number was announced on December 29, but no one attempted to redeem a winning ticket until November 2011, when an attorney in Quebec named Philip W. Johnston contacted the Iowa Lottery Division to say he was the winner. Johnston said that he was sick, and asked if the check could just be mailed.

Johnston gave lottery representatives the correct 15-digit serial number for the winning ticket over the phone, but they were wary, and asked him to describe himself and what he wore on the day of the purchase. None of it matched the man in the surveillance video, so officials rejected Johnston’s claim.

On December 6, 2011, Johnston called back with Story No. 2: He wasn’t actually the ticket purchaser; he was just representing “an anonymous party,” according to a complaint later filed by Iowa authorities. Lottery officials told Johnston that they couldn’t release winnings to an anonymous party. They figured that was the last they’d hear of him. (The Houston Press tried reaching Johnston through a Quebec phone number listed for his wife. A man who answered said Johnston was not home, then hung up. Subsequent calls went straight to voicemail, and although multiple messages were left, Johnston never replied.)

Twenty-three days later, two hours before the window to redeem the winning ticket would close, the Iowa Lottery Division received a hand-delivered package from a Des Moines law firm. In it was a letter from attorney Julie McLean, saying that her firm represented a representative of the winner. Also enclosed was a claim form, signed by a New York attorney named Crawford Shaw, on behalf of a Belize-based entity called Hexham Investments Trust, which would hold the winnings for the ticket purchaser, who wished to remain anonymous.

On the form, the 76-year-old Shaw misspelled “Hexham.” Lottery officials checked the incorporation papers for Hexham and found that Shaw was listed as trustee, with Johnston listed as president.

Not surprisingly, lottery officials remained skeptical. On the day lottery officials received Shaw’s claim form, Iowa Lottery CEO Terry Rich issued a statement calling the situation “one of the biggest lottery mysteries in the country.”

Lottery officials told McLean, the Des Moines attorney, that they could not pay an anonymous winner. On January 17, 2012, Shaw met with Iowa lottery representatives to further explain his involvement. But it was futile — he claimed not to know the actual winner’s name.

Lottery officials were not impressed. They demanded the names and contact information of everyone who had ever touched the ticket.

Shaw and McLean counter-offered: If the lottery division just gave the money to Hexham, the trust would donate the proceeds to charity. The Iowa Lottery Division could even pick the charities. Shaw would get $5,000 for his time and trouble.

When lottery officials declined, Shaw formally withdrew his claim.

But by that time, Iowa law enforcement had been investigating the attempted claim for nearly two months. Shortly after Johnston called Iowa authorities from Quebec to say he was the winner, an agent with the Iowa Division of Criminal Investigation contacted the Royal Canadian Mounted Police for help in locating him. According to a later court filing, the search was “confounding and ultimately fruitless.”

Johnston proved almost as elusive as Bigfoot, but finally, in August 2013, he agreed to talk to Iowa agents. He explained that he’d been contacted two years prior by Rhodes and his attorney, Robert Sonfield, for help in cashing in the Hot Lotto ticket. After all, Sonfield had done plenty of favors for Johnston over the years: In many of the corporate mergers Sonfield handled, he brought in Johnston as a “consultant.” It’s unclear what exactly Johnston — whose office address has variously been listed in Quebec, Belize and the British West Indies — offered as a consultant.

Eight months later, in April 2014, Crawford Shaw finally admitted to Iowa agents that he, too, had a longstanding professional relationship with Sonfield, and that Sonfield and Rhodes sent him the winning ticket and asked for his help in claiming it. (Shaw, who now lives in Houston, declined to comment for the story, other than to say that he had no idea who bought the winning ticket, and that he was just doing a favor for Sonfield.)

Two months later, Iowa agents traveled to Houston to interview Sonfield and Rhodes, hoping they could reveal the identity of the Hot Lotto ticket purchaser from 2010. But the duo “did not make themselves available,” according to an affidavit. (Sonfield did not respond to multiple requests for comment.)

Frustrated, and perhaps extremely annoyed by an international consortium of uncooperative lawyers, Iowa law enforcement released the video (and audio) of the fateful 2010 purchase of the winning ticket, asking the public’s help in identifying the man in black.

One man in Maine thought he recognized the ticket purchaser right away.

Michael Boardman, the marketing manager for Maine’s lottery, couldn’t quite make out the man’s face, but the voice rang a bell. Five months earlier, Tipton had traveled to Maine to help Boardman on a project, but Boardman also recognized Tipton’s voice from ten years’ worth of quarterly conference calls.

In addition to the voice, “the way that he moved and shuffled around in his pockets to get things out” was classic Eddie. Boardman emailed a tip to Iowa law enforcement.

That’s when the walls began to close in on Eddie Tipton and Robert Rhodes.

“I was not hurting for money,” Tipton told . “Not hurting enough that I need to take a chance and ruin my whole life. No way.”

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In November 2014, Iowa agents interviewed Tipton.

According to an affidavit filed later, Tipton denied that he was the man in the surveillance video. He told the agents he was prohibited from playing in the lottery, and besides, he was in Houston visiting family when the ticket was purchased.

Tipton, who had apparently never seen a single episode of Law & Order, was unaware that agents had cell phone records placing him in the Des Moines area that day.

Unconvinced by Tipton’s denials, agents interviewed his co-workers at the lottery association, including his close friend Ed Stefan, who later said that when agents showed him the QuikTrip video, he felt sick to his stomach. He told agents that seeing his friend wrongfully buy a lottery ticket was like finding out his mom was an ax murderer.

But in his only interview, given after he was charged but before his trial, Tipton told The Daily Beast that authorities had the wrong man, and were just desperate to pin the crime on someone before the statute of limitations expired.

“I was not hurting for money,” Tipton told The Daily Beast. “Not hurting enough that I need to take a chance and ruin my whole life. No way.”

Additionally, Tipton’s attorney, Dean Stowers, suggested to The Daily Beast that the man in the surveillance video might have been “a skinny man in a fat suit.”

Stowers was less colorful in his comments for this story, saying only in an email, “Our position is that what the State claims happened does not appear to violate the statutes that Mr. Tipton is accused of violating.”

In January 2015, Tipton was charged in Iowa with two counts of fraud. Two months later, as Rhodes was about to leave home for his regular visitation with his kids, he was arrested by a Texas Ranger and driven to Fort Bend County Jail.

Rhodes conceded in his later deposition that, within his first three weeks in jail, while awaiting extradition, investigators with the Iowa Attorney General’s Office let him know they wanted to cut a deal. And not just Iowa officials — after Tipton’s arrest, Wisconsin lottery officials had reviewed the 2007 Megabucks drawing and believed that it may have been rigged as well.

He held out until December 2015, when, through defense attorney Terry Yates, Rhodes arranged a meeting with Iowa and Wisconsin assistant attorneys general. Yates stipulated that the meeting had to be in Chicago; he assured Rhodes that Iowa agents couldn’t arrest him there.

Rhodes said he only considered talking to authorities in the first place because he thought Tipton should have just pleaded out and spared everyone the grief. Tipton, Rhodes said in his deposition, “did all kinds of stuff that I felt jeopardized me, and more importantly, my children.”

At the December 9, 2015, Chicago meeting with Wisconsin and Iowa authorities, he signed something called a proffer agreement — a sort of test run to see what kind of information a potential witness or defendant has before the government decides whether to grant immunity.

“That was my best friend, and I felt like I was betraying him,” Rhodes said.

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Rhodes knew he had important information — but he was still concerned about taking the next step to becoming an official stool pigeon. According to his deposition, he was slightly afraid of what Tipton might do.

“Here is my best friend...he’s a big boy,” Rhodes said of Tipton. “And he’s a good old boy. And in Texas, good old boys have lots of guns, and they have pickup trucks, and you never know what a good old boy might get pissed off [sic] and come after you.”

But, he added, “that was my best friend, and I felt like I was betraying him.”

Not a huge fan of Rhodes, Tipton’s lawyer, Stowers, wanted to emphasize that last point.

“Well, you were betraying him, weren’t you?” Stowers asked.

“I was telling the truth,” Rhodes said.

“Well, you were betraying him, though?”

“Yeah,” Rhodes said. “I guess I was.”

In July 2015, just as Tipton was going to trial, Rhodes still hadn’t decided whether or not to flip.

Assistant Attorney General Sand was getting annoyed. Rhodes’s attorney, Yates, emailed Sand on July 10, 2015, with his thoughts: “Your case [against] Tipton seems suspect at best, and Rhodes didn’t do a damn thing illegal.”

Things would change after Tipton went to trial five days later.
Leading up to the trial in Des Moines, Sand had a little bit of a problem.

He had to persuade jurors that Tipton somehow manipulated two super-secure computers in a glass-walled room, with cameras inside and co-workers on the outside not noticing. Plus, forensic examiners had already inspected the computers used in the Hot Lotto draw, but those had already been retired and wiped clean.

But Sand had some helpful witnesses: one lottery association employee, tasked with reviewing security footage from inside the draw room, saw that Tipton went into the room on November 20, 2010, to change the computers’ clocks. While Tipton was inside, the time-stamp on the cameras showed an anomaly — it appeared that the cameras were only recording about one second per minute, rendering the video largely useless.

The hitch in the recording was addressed in a later civil suit, filed by an Iowa Hot Lotto player in February 2016. Citing other court rec-ords from the Tipton case, the suit explained that the association bought the cameras and software used to monitor the draw room computers from a company owned by the brother of Tipton’s friend, fellow association employee Ed Stefan. An association IT employee later testified that the equipment was “‘buggy’ from the date of installation,” sometimes freezing up and causing a “blue screen of death.”

The association’s unique approach to security took a further hit when the IT employee revealed that, every quarter, the draw-room camera recordings were put on disk and stored in Stefan’s basement.

Per Sand’s theory, glitches in the video surveillance — well-known by Tipton and IT personnel — gave Tipton enough time to surreptitiously stick a thumb drive with a modified code — a bug — into one or both of the computers. The bug would be programmed to destroy any trace of itself after it completed its mission, which, according to Sand, is why forensic examiners couldn’t find anything wrong.

Tipton’s attorney, Stowers, found this laughable.

In a later appeal, Stowers argued that Sand “was the equivalent of a ghost hunter called to the scene of a possible ghost sighting who, upon finding nothing after thorough investigation, declared that a ghost must have been there because ghosts leave no trace behind.”

At trial, Tipton’s siblings, including Tommy (months away from being charged himself), testified that their brother wasn’t the man in the video buying lottery tickets and a hot dog. According to Tommy, his brother didn’t even like hot dogs. This was clearly a tragic case of mistaken identity.

In February 2016, after Sand won two convictions against Tipton, he shared his own thoughts with Yates.
“You implied in your previous email that Rhodes is having a hard time coming around to full cooperation,” Sand wrote. “I think your [July 2015] email could be a good reminder to him that he is not indispensable to my trying and convicting Eddie Tipton. We’ve already been down this road once. If I do it without him again, he’s facing a lot worse than what was in front of him last time.”

Seven months later, in September 2016, Rhodes agreed to flip.
In September 2015, two months after Tipton was sentenced to ten years in prison, forensic investigators in Wisconsin finally figured out how Tipton rigged the Megabucks game, offering a key to how he may have rigged the Hot Lotto game.

That month, special agent Joanne Joy of the Wisconsin Department of Justice took possession of the three retired random-number-generator computers that were used in the 2007 drawing. According to a Wisconsin criminal complaint filed in December 2016, the computers, which had been sitting in storage since being swapped out in 2013, were built by the lottery association and delivered to the Wisconsin Lottery Department by Tipton and Stefan.

A forensic analysis of the computers later revealed that someone had installed a type of file called a “dynamic-link library” into one of the computers’ codes, which “was able to redirect the normal operation of the random number generator program.”

In December 2016, the State of Wisconsin charged Tipton and Rhodes with racketeering and theft by fraud; Tipton was also charged on four counts of computer crime.

Citing pending criminal proceedings, an association spokesperson would not comment on what security measures, if any, were taken in the wake of the scandal. But in June 2016, U.S. Senator John Thune of South Dakota, who chaired the Senate Committee on Commerce, Science, and Transportation, demanded that association officials let the committee know what they were doing “to ensure the integrity of lottery games.”

Gary Grief, the association’s board president, replied in a letter that none of the random-number-generator computers currently in use had software developed by Tipton.

The association also beefed up “physical security through increased use of video cameras and recordings, motion detectors, and other security measures.”

Grief also sent the senator a copy of a report by a law firm that the association hired to conduct an independent investigation. It’s unclear how much the association paid the international law firm to conduct this “confidential and privileged investigation,” but if it was more than the cost of a scratch-off ticket, the association was ripped off yet again.

For one thing, the investigators — a team comprising “skilled employees of member lotteries” — focused on “why” the jackpot-fixing happened, rather than on “knowing precisely ‘how it was done.’”

The team also claimed it could not determine the scheme’s financial or reputational fallout, noting, “While it is apparent [the association] has been damaged — for instance, it has incurred legal fees and costs in responding to the Tipton cases that would not have been otherwise necessary — these damages are not complete or fully quantifiable at this time.”

In that regard, at least, the team had a point: In March 2016, the same time the team wrapped up its investigation, Tommy Tipton was charged with theft in Iowa, over the Colorado lottery winnings. The complaint also alleged that the former justice of the peace purchased a winning ticket in an Oklahoma Hot Lotto game in November 2011 that was rigged by his brother. Tommy had a friend redeem the ticket and then shared a portion of the $907,000 with the friend, according to the complaint. (Tommy’s attorney, Mark Weinhardt, told the Press that his client intends to “vigorously” defend himself.)

It wouldn’t be until ten months later, in February 2017, that Kansas Attorney General Derek Schmidt filed a civil suit against Eddie Tipton and two friends who claimed $44,000 from two Kansas lottery draws in 2010 that Tipton had allegedly rigged. The suit is seeking $187,000 in restitution and civil penalties under the state’s False Claims Act.

The association is also defending itself against two civil suits filed in Iowa by lottery players who say they were cheated out of a fair shot at winning the games Tipton had rigged. In one case, financial adviser “Lucky” Larry Dawson also sued the Iowa Lottery and the lottery association, claiming that while he won $9 million in a 2011 Hot Lotto game, the winnings would have been bigger if Tipton hadn’t rigged earlier jackpots.

The association and the Iowa Lottery filed a motion to dismiss the case, but in October 2016 a judge denied the motion. The suit is still pending.

Another pending suit, filed in January 2017 by an Iowa insurance salesman, is seeking class-action status on behalf of hundreds of thousands of players who spent money on rigged games.

While awaiting their upcoming trials — Tipton’s in July, his brother Tommy’s in September — they’ve remained free on bond. They’re keeping a low profile.

Rhodes, whose plea deal recommended a two-year probation for the Iowa charges, and six months of house arrest for the Wisconsin charges, has continued with new and diverse business ventures. One, a flight school in Angleton called Third Coast Aviation, offers Groupons for private flight instruction in a single-engine, fixed-wing Piper built in 1979.

“Mr. Rhodes... is ready to start a new chapter in his life,” Yates said.

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Another venture, Online Sales Juggernaut, offered to boost businesses’ sales with increased Internet presence and “hard nose sales know how,” but the company’s website was deactivated after the Press left voicemails seeking more information.

In January and March 2017, Rhodes pleaded guilty to fraud charges in Iowa and Wisconsin, respectively. He also made his first payment — $250,000 toward $409,000 in restitution — for the Wisconsin charges.

In January, his attorney, Terry Yates, released a statement saying, “Mr. Rhodes is thankful for all of the support he has received from his family and friends throughout this difficult time. He is ready to start a new chapter in his life.”

Later this year, he is expected to return to those Iowa and Wisconsin courtrooms — this time, to help put his former best friend in prison.
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