Powerball Mania Masks Lottery Scandal With Colorado Ties

Additional images, videos and more below.
Additional images, videos and more below.

Interest in Powerball leading up to the next drawing, on Wednesday night, January 13, is reaching frenzied proportions thanks to a jackpot that's currently being estimated at $1.4 billion — and could go higher.

But even as excitement builds, an investigation into a lottery rigging scheme that prompted an indefinite leave for the  executive director of the organization that puts on Powerball is ongoing — and the scandal has strong ties to Colorado.

The Washington Post traces the roots of the inquiry to December 2010, when a man bought the winning ticket for an Iowa lotto worth $16.5 million at a Des Moines convenience store.

Nearly a year would pass before, in November 2011, a Canadian man contacted the Iowa lottery and ID'd himself as the winner. He retracted this statement shortly thereafter, saying he merely represented the ticket-purchaser. After that, a New York lawyer maintained that what the Post describes as a "Belize-based trust" was the actual beneficiary.

In the end, all claims on the cash were withdrawn and the money was never distributed. But investigators were curious about the shenanigans, and after eyeballing surveillance footage, they were able to establish that the person who bought the ticket in 2010 was Eddie Tipton, who'd previously served as the security director for the Powerball-sponsoring Multi-State Lottery Association — an outfit in which the Colorado Lottery is a member.

Eddie Tipton.
Eddie Tipton.

Circa January 2015, Tipton was charged with fraud in the case. Prosecutors alleged that he'd installed software on lottery computers allowing him to guarantee that he'd wind up with the golden ticket.

Tipton was found guilty last July and sentenced to ten years behind bars in September — but the case didn't end there.

In October, the Iowa Department of Public Safety issued a press release revealing that Tipton had been hit with additional charges as a result of two previous lottery-related crimes — one in Wisconsin, the other in Colorado.

The department maintains that a November 23, 2005 Colorado Lotto drawing with a $4.8 million jackpot and a payout of $568,990 was claimed by Tipton's brother, Tommy Tipton, "at Tommy's request."

The Colorado Lottery released the following statement about the matter:

The Colorado Lottery continues to be committed to ensuring the security and integrity of lottery products. We strive to ensure that Lottery games are fair and offer everyone an equal chance to win. The Colorado Department of Revenue and the Colorado Lottery are aware of this issue and have been working closely and collaboratively with the Colorado Bureau of Investigation, Iowa Bureau of Investigation, and the Pueblo District Attorney's Office to investigate any allegations of wrong doing.

Charles Strutt.
Charles Strutt.

Months later, in late December, news broke that Charles Strutt, who'd served as executive director of the Multi-State Lottery Association since it was founded in 1987, had been stripped of his duties. He reportedly hopes to return to his job after the Tipton investigation runs its course and he is presumably exonerated.

Word of Strutt's leave didn't make nearly the splash that Tipton's schemes did, and any concerns about his status, and what it might portend about the integrity of the lottery, have been largely swept aside by the tsunami of publicity over the huge Powerball jackpot.

The Colorado Lottery has been playing up the latter on its Twitter account.

Here's a message after the prize passed the $1 billion mark....

...and another update from yesterday:

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Of course, the odds of any individual ticket buyer picking up that much coin are infinitesimal — one in 292.2 million.

But even finishing back in the pack can be lucrative.

CBS4 notes that "six partial winning tickets produced winners" this past Saturday in Colorado, with amounts "ranging from $50,000 to $150,000, including a gas station on Alameda Avenue in Denver."

Would people continue to buy tickets for the Powerball if they knew about the Tipton investigation and Strutt's leave? Probably. That's the power of $1.4 billion.

Look below to see a CBS News video from last year, shortly after word about the Tipton allegations surfaced, followed by a CBS4 piece about the latest jackpot. Also on view: the Tipton complaint and affidavit, which add more details about the alleged Colorado fraud.


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