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Jan 15, 8:10 PM EST

Lottery worker faces fraud charges in mystery Hot Lotto case


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DES MOINES, Iowa (AP) -- An Iowa lottery worker who illegally played the lottery won a multimillion-dollar jackpot in 2010 and asked others to help him claim it, authorities said Thursday after announcing fraud charges against him.

Eddie Raymond Tipton, 51, of Norwalk, Iowa, has been charged with two felony counts of fraud in a case where authorities have been trying to identify the winner of the $14.3 million Hot Lotto ticket since a New York lawyer tried to claim the ticket shortly before the one-year deadline in 2011. Tipton, who is the director of information security for the Multi-State Lottery Association in Iowa, is being held at the Polk County Jail on $10,000 cash-only bond. Court records do not list an attorney.

The Multi-State Lottery Association oversees several popular lottery games, including Hot Lotto and Powerball. Employees are banned from buying tickets or winning prizes.

When attorney Crawford Shaw tried to claim the jackpot with the winning ticket in his hands, lottery officials confirmed the ticket was valid. But they refused to pay because Shaw wouldn't name anyone involved with the purchase and handling of the ticket. Shaw later withdrew the claim and said he didn't know the winner's identity. Authorities have not said whether Shaw or anyone else would face charges in the case.

Authorities opened up the investigation to the public in October and released a convenience store video that purported to show the mystery winner as he bought the ticket. Authorities at the time said they weren't sure if the winner was involved in possible fraud or if he was the victim of a crime. They asked the public for help in identifying the man, whose face was obscured by a hoodie.

A former co-worker of Tipton's subsequently contacted authorities with the suspicion that it was Tipton in the video. Iowa Division of Criminal Investigation agents also interviewed others, analyzed the ticket purchaser's voice in the video and matched a license plate in the parking lot of the convenience store to Tipton.

Authorities say Tipton contacted two men in Texas about help with claiming the jackpot anonymously. One man attended school with Tipton; it's unclear how Tipton knows the other man.

The men then contacted Shaw and a Canadian man for further help, according to an arrest affidavit. Shaw and the Canadian man listed themselves on a newly created trust to collect the lottery prize. Shaw at the time told lottery officials the trust's proceeds would go to a corporation in Belize, a country known as a tax haven.

Crawford soon withdrew his claim and said he didn't know the winner's name. In October, officials had said Shaw was cooperating in their investigation.

Iowa Lottery CEO Terry Rich called the case one of the strangest in the history of the lottery.

"We believe this is the largest lottery jackpot ever to be claimed, only to have that claim withdrawn," he said Thursday.

The prize money was eventually returned to the states participating in Hot Lotto. The Iowa Lottery gave away its share during a 2012 promotion.

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