Today's Guest

TERRY RICH

Terry Rich is the retired President and CEO of the Iowa Lottery Authority. While acting as president, Mr. Rich increased sales at the Iowa Lottery by over $1 Billion and under his leadership, the organization unraveled the largest lottery fraud scheme in American history. For his role in solving the Hot Lotto fraud scheme, Terry received the prestigious international Gambling Compliance Outstanding Achievement Award.

Numerous national media appearances include ABC, NBC, HBO, CBS, 20/20, CNN, CNBC, USA Today and The New York Times. 

Mr. Rich recently launched a book "The $80 Billion Gamble", recounting the fraud scheme and how he and his organization were able to stop it! Check it out below!

 

"Hot Fraud-o"

Eddie Tipton and America's Largest Lotto Scam

The guys at Cash Only are excited to announce the release of their second episode, which takes on the largest lottery fraud scheme in United States history. The incredible story centers on an insider job that involved the lottery associations of 36 states and US territories, spanned 10 years, and ultimately earned $25 million. Join the fellas March 22, as they sit down with the man who led the organization that broke the case, Former Iowa Lottery Association CEO Terry Rich, as they delve into the unbelievable, historic investigation.

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The Players

  • Eddie Tipton

    •  Mastermind behind the multi-state Hot Lotto fraud scheme. As Director of Information Security at the Multistate Lottery Association (MUSL), he developed malware to manipulate the random number drawings of the multi-state Hot Lotto game and defrauded MUSL out of $25 million over ten years. Currently serving 25 years in an Iowa state prison.

  • Tommy Tipton

    • Eddie Tipton’s brother and a Bigfoot hunting enthusiast. He was complicit in the Hot Lotto scam, claiming winnings as early as 2005. After Eddie Tipton’s arrest in Iowa, a tipster in La Grange, Texas called to inform Iowa investigators that Tommy had won the lottery in 2005. His bulk-cash exchange of $100,000 with an FBI informant also tipped investigators to a potential financial crime. 

  • Robert Rhodes

    • One of Eddie Tipton’s best friends. Collected $783,258 from a winning ticket in Wisconsin’s “Very Own Megabucks Game” in 2008. Rhodes turned state's evidence against Eddie Tipton.

  • Rob Sand

    • Iowa Prosecutor in Eddie Tipton’s fraud case. After the initial conviction, Sand's keen eye noticed unlikely coincidences and connections Tipton had with several previous Hot Lotto winners. Pursuing these leads, the state was able to secure a felony conviction of tampering with lottery equipment. In 2018, Sand was elected as Iowa State Auditor.

  • Sean McLinden

    • A computer expert who conducted forensic analysis and reverse engineered the software of the Wisconsin random number generators, which led to the discovery of Tipton’s malware.

  • Ed Stefan

    • An old friend and classmate of Eddie Tipton. The two were close friends, studied together at the University of Houston, and vacationed together. Stefan’s identification of Tipton’s voice on the surveillance tape proved integral to his conviction.

  • Jason Maher

    • Tipton’s former colleague and online gaming buddy. Maher referred to Tipton as having a “heart of gold”; he was devastated at the realization his friend was behind the fraud scheme.

  • Terry Rich

    • Former CEO of the Iowa Lottery Authority, the state organization that was instrumental in revealing this decade long fraud scheme. In the wake of the investigation Terry was awarded the International Gambling Compliance Outstanding Achievement Award.

  • Accomplices

    • Alexander Hicks (deceased) Friend of Eddie Tipton who claimed a $568,990 prize for the Colorado Lottery on behalf of Tipton.

    • Kyle Conn – Friend of Tipton from Hemphill, TX. Cashed a winning lottery ticket for $644,478 in the Oklahoma Lottery. Identified via their friendship on Facebook.

    • Christopher McCoulsky – Friend of Tipton, Texan; cashed winning Kansas Lottery ticket for $15,402

    • Amy Warrick – Friend of Tipton, Iowa; cashed winning Kansas Lottery ticket for $15,402.

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Jargon

  • Multi-State Lottery Association (MUSL): pronounced “muscle”, a non-profit association of 36 member states and US territories which facilitates multi-jurisdictional lottery games such as Powerball and Lotto America.

  • Iowa Division of Criminal Investigation (DCI): A division of the Dept. of Public Safety, Iowa DCI provides law enforcement services such as investigative support, gaming regulation, and intelligence and forensic services within the state and at the request of federal agencies.

  • Random Number Generator (RNG): a program that generates a sequence of numbers that cannot be reasonably predicted. The RNGs at MUSL use a Geiger counter to measure levels of radioactive Americium-241 in the ambient air. This measurement is fed into the algorithm which produces a truly unpredictable set of numbers.

  • QVRNG.ddl (Quantum Vision Random Number Generator): Eddie Tipton’s malicious computer program that allowed him to predict potential winning numbers on certain dates. The program checked specific requirements of the drawing, then manipulated the RNG to limit its randomness. If the drawing took place after 9:00pm, on a Wednesday or Saturday, in a non-leap year, on either May 27, November 23, or December 29, the random number generator used a predetermined algorithm to generate the winning numbers. Tipton could not hand select these numbers, but it narrowed his odds from 1 in 11 million, to one in a few hundred.

  • Rootkit: Malware that allows an unauthorized user to gain control of a computer system without detection. Rootkits typically erase computer memories to hide their tracks when finished.

  • Bigfoot: A mythical creature who has evaded detection without fail for centuries, yet often leaves visible and discernible clues of its existence in areas that are convenient for humans to access (but only without cameras). Adam swears he saw one in Tahoe.

 

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