Brad Schimel
Press Release

AG Schimel Announces Charges in Megabucks Lottery Fraud

The complaint alleges that the two defendants conspired to win the December 29, 2007, Wisconsin Megabucks lottery game.

By - Dec 23rd, 2016 12:00 pm

MADISON, Wis. – Attorney General Brad Schimel announced today the filing of a criminal complaint charging Eddie Tipton and Robert Rhodes, both of Texas, with multiple felonies for their alleged roles in defrauding the Wisconsin Lottery. Tipton and Rhodes are both charged with Engaging in Racketeering Activities and Theft by Fraud. Tipton is also charged with four additional counts of Computer Crime.

The complaint alleges that the two defendants conspired to win the December 29, 2007, Wisconsin Megabucks lottery game. Tipton, who was an employee of the Multi-State Lottery Association and responsible for programming the software used in the random number generator (RNG) machines used to pick the winning numbers, allegedly planted a modified code in the RNG software that produced a predictable set of winning numbers when certain conditions were met. Tipton allegedly supplied those numbers to Rhodes, who then purchased a ticket with the winning numbers. Rhodes later submitted the winning ticket for payment, and Rhodes and Tipton allegedly split the proceeds totaling $783,257.72. The complaint further alleges that three other Wisconsin Megabucks lottery drawings were manipulated by Tipton’s modified code.

Tipton is summoned to make his initial appearance on February 13, 2017, in Dane County Circuit Court. Rhodes is summoned for his initial appearance on February 16, 2017.

Engaging in Racketeering Activity is a Class E felony, punishable by a fine of not more than $50,000 and/or imprisonment for not more than 15 years. Theft by Fraud is a Class G felony, punishable by a fine of not more than $25,000 and/or imprisonment for not more than 10 years. Computer Crime is a Class I felony, punishable by a fine of not more than $10,000 and/or imprisonment for not more than 3 years and 6 months, as to each count.

Tipton and Rhodes also are both currently charged in Iowa with Ongoing Criminal Conduct for their part in attempting to defraud the Iowa lottery in December 2010. Tipton’s Iowa charges include his alleged involvement in similar schemes in Colorado, Kansas, and Oklahoma. Those charges have not been resolved, and the defendants are presumed innocent. Rhodes is scheduled to enter a guilty plea in Iowa on his case on January 9, 2017.

This case was investigated by the Wisconsin Department of Justice-Division of Criminal Investigation, in conjunction with the Wisconsin Department of Revenue, Iowa Attorney General, Iowa Division of Criminal Investigation, and law enforcement agencies in Colorado, Kansas, Oklahoma, and Texas.

The criminal complaint is attached.

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