Arrest in Mystery of $14.3M Unclaimed Lottery Ticket

Iowa investigators nab insider in big lottery win that was never paid.

ByABC News
January 15, 2015, 7:11 PM

— -- Iowa officials say a lottery employee has been arrested after being identified as the mystery winner of a multimillion-dollar Hot Lotto ticket that baffled investigators for years.

The Iowa Division of Criminal Investigation said Thursday that 51-year-old Eddie Raymond Tipton, of Norwalk, faces two felony counts of fraud. He is being held at the Polk County Jail. Court records do not list an attorney.

Tipton is the security director for the Multi-State Lottery Association in Iowa. Officials say he bought the Hot Lotto ticket in 2010, despite being legally prohibited. He is accused of asking others to claim the ticket.

A New York lawyer in 2011 waited shortly before the one-year deadline to try to claim the ticket but later withdrew. Authorities say the case remains under investigation.

Authorities opened up the investigation to the public in October and released a convenience store video that purported to show the mystery winner as he bought the ticket. Authorities at the time said they weren't sure if the winner was involved in possible fraud or if he was the victim of a crime. They asked the public for help in identifying the man, whose face was obscured by a hoodie.

A former co-worker of Tipton's subsequently contacted authorities with the suspicion that it was Tipton in the video. Iowa Division of Criminal Investigation agents also interviewed others, analyzed the ticket purchaser's voice in the video and matched a license plate in the parking lot of the convenience store to Tipton.

Authorities say Tipton contacted two men after he realized he was the winner. Those men then contacted Shaw and a Canadian man to help claim the jackpot, authorities said.

Iowa Lottery CEO Terry Rich called the case one of the strangest in the history of the lottery, The Associated Press reported.

"We believe this is the largest lottery jackpot ever to be claimed, only to have that claim withdrawn," he said Thursday.

The state in 2013 gave a Canadian man immunity in exchange for information about the never-collected $14.3 million lottery jackpot that was inexplicably abandoned, according to state prosecutors.

The unidentified man in Canada gave the information to the Iowa Attorney General's Office and Division of Criminal Investigation, pointing to possible leads in strangest lottery claims in the 26-year history of the Iowa lottery.

It's an unprecedented case of a winning lottery ticket that was claimed by a lawyer from New York who then withdrew that claim, officials say.

Investigators did not say what led them to the Canadian man.

It all began in December 2010 with a winning ticket purchased at a Des Moines gas station for Iowa's Hot Lotto. The ticket went unpaid until a breakthrough hours before the deadline when New York attorney Crawford Shaw presented the valid, winning ticket.

Murder? Blackmail? Investigators Check Why $14.3M Jackpot Was Abandoned

Shaw said he was claiming the prize on behalf of an anonymous trust. He said the trust's proceeds would go to a corporation in Belize, a country that has a reputation as a tax haven.

Lottery officials refused to pay the jackpot until Shaw divulged names of everyone who had possessed the ticket, saying they wanted to know that it had been legally possessed. Shaw later withdrew his claim and the $14.3 million was forfeited.

Shaw declined to comment when reached by ABC News in 2013.

The Associated Press contributed to this story. With reporting by ABC News' Cameron Brock.