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The biggest lottery scandal - he knew what the Hot Lotto numbers would be!

Published: Tuesday, August 21, 2018

How to win the lottery ? Enter the winning combination of numbers to a lottery computer, just after the draw when it is known. The method is available only for the talented employees of the unprotected information system. This is what happened in the USA in Hot Lotto.

It happened quite a long time ago, because in the vicinity of Christmas 2010, but the fame remained because the trial of one of the employees began in 2015. That is the first, the most significant, and severe case concerning a breach of security of a lottery and its fraud to obtain financial benefits. About two days before the draw, Eddie Tipton was already walking with a winning $16.5 million coupon in his pocket! He was going to the cashier to confirm his win. But he already knew and did not need any luck. Everything was part of his intricate plan, although it is hard to believe it. A month earlier he had entered his numbers into a lottery computer system in a particular lottery room to which he had access. At least that is what the investigators say.

Tipton believes that his accusation of this act has some other vague basis. Additionally, the lottery managers had to find the person who made the burglary and, according to him, they did not suspect who they needed, they wanted to defend themselves because they considered themselves innocent. He was not arrested until 15th January 2015, more than four years after winning a big prize, which raises further suspicions. He was arrested on charges of fraud, which was a shock to him. Tipton is 52 years old, unemployed and said to be saving money. His trial was due to start on July 13th. The police supposedly have a recording of how he buys a Hot Lotto ticket, and his voice in the shop was recognized. He was also accused of misusing security at the lottery headquarters and using a partner, a close friend - to collect the prize sum in order not to cast suspicion on himself. Eddi's story could be the story of the biggest lottery jackpot fraud in the world's history. Whether one man could have done it, the investigators believe that someone had to help him.

Eddie has been a long-time employee of an organization that supervises some lotteries organized in the United States. He says he took his job very seriously and had no reason to dream of money. He had no reason to risk and waste his whole life.

However, on November 20th he went to a secret, barricaded room, where the lottery had a Hot Lotto computer. Only he and four of his coworkers had access there. Officially, he went there to update the system to winter time, but investigators say he was rummaging through the monitoring and turned off the cameras. Unfortunately, not everything can be seen on the recordings, Tipton set the cameras so that they recorded only a second of each minute. He had enough time to use a unique program installed on his portable memory, which is professionally called "root-kit". It would be enough to connect such a device to the USB port, which would give him control over the system by using a "backdoor". The so-called backdoor for burglaries may be left during the design of the system. In such a situation he could manipulate lottery numbers without any trace.

The suspect is familiar with this type of cracking programs. He even gave presentations about the dangers associated with it. He showed some details, so he was considered a man obsessed with breaking IT security. Tipton insists that it wasn't him who bought the winning coupon, but a stranger who did it, who isn't exactly visible on the monitoring tape. His friend, who helped to claim the reward, has also been charged. How did it end? We will certainly keep you informed in the future.

27 August 2018 update: A employee who has forged a lottery ticket goes to prison?

The trial rolled out quickly and the person who was supposed to care about the security of the Hot Lotto lottery, and in practice exploited the gaps in the system for his benefit, was found guilty of the actions he was charged.

We wrote here about Eddie, who probably was the first to cheat on the lottery in history. After a verdict on Monday (July 2015), which is perhaps unprecedented in the world, the lottery manager from Iowa stated that their games were completely safe. However, how does this relate to the fact that the person responsible for security has managed to deceive the system?

Eddie Tipton, a 52-year-old security director at a lottery company, was convicted of double fraud. The trial lasted a week, and he was accused of installing a unique self-clearing lottery program that allowed him to prepare the winning lottery ticket at Hot Lotto on December 29, 2010, when the jackpot totaled $14.4 million.

The defendant's lawyer said that have had evidence of innocence that would allow him to win the appeal. According to the lottery authorities, Eddie's conviction has proved that they have proper security systems that have led them straight to the abuser. However, the experts say something different. According to them, in 2010 this type of security was missing or too weak. No one has foreseen that one of the few people who will have access to the lottery computer will be able to use it for his purposes.

What's more, these deficiencies could have let Eddie hide his crime for some time without any problems. There is now a great danger that Tipton's followers will emerge, and this time they will be able to shade more accurately the traces of the crime by learning from his mistakes. That will be the thinking of the thief - if he succeeded, why not try it?

The first such case of Lotto fraud

The convicted person did not show any emotion when reading out the sentence. He left the court building without any comments that the journalists expected. He remained free until 9 September 2015. He may be in prison for up to 10 years. The investigation itself started at the end of 2011 when two different people tried to withdraw money. This money has never been paid out. Eddie tried to wash the track leading to him in this way.

Lack of evidence?

Despite the sentence, the lawyer claims that there is no direct evidence of the former security director crime. There is no evidence, in the form of recordings of conversations or monitoring, that he commissioned an attempt of the payout. Despite this verdict, he is not surprised because he believes that the court relied on speculation for lack of evidence. The lawyer argues that the very fact that the system is poorly protected calls into question the evidence gathered. The monitoring tapes were stored in the security boss's basement without any procedures, so who knows what happened to them? The whole issue should affect thinking about the security of information systems. It turns out that even in such sensitive places as lottery integrity systems, there are critical errors.