Although alarm bells went off at the FBI in 2006 over the movement of suspiciously large amounts of cash in Texas and elsewhere, investigators bought the explanation of a Texas judge that he was trying to avoid tipping his conservative Christian wife that he had won 0,000 in the Colorado lottery.
Thus, the FBI missed uncovering what 10 years later because one of the biggest lottery fraud cases in history. The full story came out last week in testimony by perpetrators of the fraud, who are now cooperating with prosecutors.
The case is of several people, including a software writer, who were able to rig a multistate lottery so that they knew ahead of time when winning tickets would appear, and could arrange to buy them.
The Fayette County, Texas Justice of the Peace, Tommy Tipton, managed to convince agents that his actions were innocent in 2006. Not long after Tipton began buying new cars and real estate in the state.
At the time they questioned him, they weren’t in possession of one important fact, that Tipton’s brother, Eddie, was an employee of the lottery. He built the lottery machine for the Colorado lottery, and created the software that was used by the Multi-State Lottery Association.
At that time an informant, Tom Bargas, was working with the FBI and telling them about his suspicions. He didn’t connect the facts about the Tipton brothers. In an interview with the Associated Press Bargas said, “I don’t think I mentioned it to the FBI. Had I, they probably would have been smart enough to know then. It was a missed opportunity. It should have been stopped immediately.”
Bargas even remembered a conversation in which he heard someone jest that Tipton ought to use his job to rig the system. Tipton laughed off the suggestion, but apparently was already deep in the process of doing just that.
A few weeks ago, Eddie Tipton agreed to a plea deal with several states in which he admitted that he created the code that allowed him to predict winning numbers three times a year on non-leap years. He and his brother worked together to buy winning tickets in five states from 2005-2011. It is thought that a $4.5 million Colorado jackpot was the first one to have been rigged.
The Tiptons recruited several friends to claim the prizes in subsequent years, in exchange for a 10 percent cut.
Bargas became involved when Tommy Tipton asked him to exchange piles of fresh bills for less conspicuous cash. He declined and contacted local police. The FBI suspected money laundering, and asked Bargas to go undercover. He talked to Tipton who convinced him that he was trying to hide his lottery winnings from his wife. He believed him and the FBI also believed him and dropped the inquiry.
As part of the plea bargain the brothers revealed the full extent of their operation and agreed to pay back $3 million. Even so, the older Tipton still could serve as much as 25 years, although Tommy Tipton, the justice of the peace, will only have to serve 75 days.
