Lottery scams: 4 failed attempts to cheat the Hoosier Lottery
Artist Mark Marturello’s March 18, 2018 illustration of Eddie Tipton’s confession behind the largest lottery scam in U.S. history. (Photo: AnoukN, Getty Images/iStockphoto)
Playing the odds using available public information is OK. But not all lottery purchase schemes have been legal.
From time to time, scammers — some savvy, others bumbling amateurs — try to shortcut the path to riches. And they usually get caught.
Here are accounts from IndyStar’s library of four failed attempts to cheat the Hoosier Lottery, and America’s largest lottery scam.
The big daddy
America’s biggest lottery scam was orchestrated by Eddie Tipton, a convicted felon who still was able to land a computer programming job with the Multi-State Lottery Association.
Defense attorney Dean Stowers (left) reacts as he and his client, Eddie Tipton, listen to the judge and assistant district attorney Tuesday, Aug. 22, 2017, at the sentencing hearing for Tipton at the Polk County Courthouse in Des Moines. (Photo: Michael Zamora/The Register)
Based in Iowa, the association is owned and operated by more than 30 member lotteries and is responsible for many of the nation’s most popular and richest lotteries, including Powerball and Hot Lotto.
Tipton installed software that allowed him to manipulate winning numbers in some of the nation’s most popular lottery drawings. The bug improved the odds of winning from 5,000,000-to-1 to 200-to-1. Starting in 2010, he was able to hijack at least five winning drawings totaling more than $24 million in prizes in Colorado, Wisconsin, Iowa, Kansas and Oklahoma.
Tipton was sentenced in 2017 to up to 25 years in prison. He was aided in the scam by his brother, who was a justice of the peace in Texas, and another Texas businessman. They were both convicted, too.
Eddie Tipton apologizes for his role in an Iowa Lottery scam before being sentenced to 25 years in prison.
The largest jackpot Tipton hijacked, a $16.5 million Hot Lotto prize in Iowa in 2010, was never paid. And ultimately, it would be the one that did Tipton in.
His scam began to unravel following unsuccessful attempts to anonymously collect on the a $16.5 million Hot Lotto ticket purchased at a Des Moines convenience store in 2010. A video showed Tipton, who was barred from playing the lottery because of his job, buying the winning ticket.
Surveillance video shows Eddie Tipton buying a winning Hot Lotto ticket on Dec. 23, 2010, at the QuikTrip on East 14th Street. Tipton is serving up to 25 years in prison for his lottery rigging scheme.
Indiana’s insider scandal
Former Hoosier Lottery security official William C. Foreman tipped two friends to the location of a $2 million scratch-off ticket in 2004. (Photo: Submitted)
The Hoosier Lottery had its own insider scandal in 2004, when a lottery security worker tipped off two friends to the location of a $2 million scratch-off winner.
After William C. Foreman shared the top-secret information with the men, they rushed to Otter’s Grocery in Cross Plain, where they shocked a clerk in the small southeastern Indiana town by snatching up about $700 worth of the $20 tickets.
The case broke open when the men tried to claim the prize. The lottery’s security chief recognized one of them as Foreman’s friend.
Foreman was sentenced in 2008 to eight years of home detention.
Stolen tickets fuel spending spree
Suspects in Hoosier Lottery scam identified as Ashlee Parsley (left), Joseph Parsley (center), and Jackie Parsley (right). (Photo: Provided by Fox59)
Three people who cashed in stolen lottery tickets worth more than $2 million went on a pending spree, buying three pickup trucks, an SUV, a camper and a home at Heritage Lake before their scam was discovered.
Ashlee Parsley, Jackie Parsley II and Joseph Parsley were charged with theft, forgery and money laundering in 2015 after Ashlee Parsley redeemed a $2 million ticket stolen from a Plainfield liquor store where he had worked.
Police at the time said it was a scheme they and lottery officials see from time to time: Employees of liquor stores and convenience stores steal lottery tickets and cash in small winnings.
The winning ticket was among tickets left at the store, which had been owned by a relative of Jackie and Joseph Parsley. When the owner died, the store was put up for sale and its lottery terminal was deactivated. But a few months later, Jackie Parsley had the terminal turned back on and it was used to activate a pack of tickets that included several winners, including the one worth $2 million.
In the week that followed, more than a half-dozen winning tickets from the stolen pack were redeemed at various locations. The biggest winner came when Ashlee Parsley, then the fiancé of Joseph Parsley, redeemed a ticket worth $2 million on Oct. 3, 2014.
Police and the Hoosier Lottery began investigating when an executor of the estate learned Ashlee Parsley had redeemed a ticket from the store. Indiana law prohibits family members from purchasing lottery tickets at stores owned by relatives.
Ashley Parsley and Jackie Parsley were convicted of forgery, theft and money laundering. Ashlee Parsley also was convicted of perjury. Charges against Joseph Parsley were dismissed.
Man checked tickets before buying
A Brownsburg man initially faced up to 50 years in prison — comparable to an armed robbery or attempted murder conviction — when he was charged in 2003 with disclosing confidential information relating to the lottery with the intent to provide a financial advantage.
Andrew D. Lowe, 19, admitted he swiped unpurchased scratch-off lottery tickets through a scanner. When the scanner identified the tickets as winners, he would buy them.
Court documents said he collected several hundred dollars from the scam, but he was charged under a 1989 law that was a Class A felony, which carried a sentence of 20 to 50 years.
Lowe ultimately pleaded to a Class A misdemeanor and served 35 days of a one-year sentence.
Losing tickets turned into ‘winners’
One of the first scams of the Hoosier Lottery, which was launched in 1988, involved three Marion County men who altered losing lottery tickets to look like $20 winners.
George Q. McDade, 34, James Holt, 34, and Eric Andrews, 23, were convicted of theft in the 1992 case. They received suspended sentences.
McDade altered losing lottery tickets into $20 winning tickets and Andrews and Holt cashed in some of the tickets. A lottery official declined to explain exactly how the tickets were altered, saying, “We like to be circumspect, but in general they were changing numbers.
“It would not have worked,” the official said, “if retailers had been checking the lottery codes.”
The lottery said 30 to 50 altered tickets were cashed in. Retailers had to pay for the altered tickets that were redeemed.
The Des Moines Register and Associated Press contributed to this report.
From stolen tickets to insider information, here's what you need to know about past efforts to cheat the Hoosier Lottery.