The continuing investigation of multiple jackpots in multiple states being awarded fraudulently and the US lottery industry fears consumers are losing confidence.

In September a MultiState Lottery Association (MUSL) computer was rigged by 52 year-old Eddie Ray Tipton of Norwalk, Iowa to produce a set of pre-programmed winning numbers. The result of which was a $14.3 million Hot Lotto jackpot in December 2010. Tipton received a 10-year prison sentence for the crime.

Nobody claimed the jackpot for a year, then two hours before the prize deadline a New York lawyer presented the winning ticket in the Iowa Lottery office. The lawyer said he would not divulge the names of the investment trust he represented. However, because the Lottery needs to know that information, they refused to release the funds. All claims on the prize were then withdrawn by the lawyer, and the $14.3 million was returned to the lottery prize pool, according to CalvinAyre.

Eventually, Tipton was recognized by his co-workers on footage from the security cam at the gas station where the ticket was purchased. Prosecutors concluded that Tipton used his position as director of information security at the MUSL to unlawfully install self-deleting malware on the computer that produced the winning numbers. Subsequently, Tipton was charged with fraud. Tipton is now suspected by prosecutors of having pulled off the same scam in at least four states on at least four separate occasions, with three other jackpots estimated at more than $8 million. Pending the appeal of his Iowa conviction, Tipton is free on bail. He faces criminal conduct charges in addition to money laundering related to jackpots in Wisconsin, Colorado and Oklahoma.

Also being investigated for potentially being involved in the scam are Tipton’s brother Tommy and his friend Robert Rhodes. Authorities say the former was one of three winners of a Colorado jackpot worth $4.5 million, and that a friend of Tipton’s was paid 10% of his share to claim the prize on Tipton’s behalf. In 2008 a law firm collected a $2 million jackpot in Wisconsin on Rhodes behalf.

The true extent of Tipton’s alleged tampering is still unknown to authorities. All MUSL jackpots won by players who chose their own numbers on tickets are being audited. The Associate Press was told by former Iowa deputy attorney general Thomas Miller that thinking Tipton only allegedly manipulated the four jackpots would be “pretty naïve.”

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