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Two Brothers Allegedly Pulled off Multi-state Lottery Scam

(CBS NEWS) Police are investigating two brothers who may have pulled off the most elaborate lottery scams ever.

Tommy Tipton, a former Texas justice of the peace, was arrested Wednesday in Iowa. He and his brother, Eddie, are accused of taking part in a conspiracy, allegedly rigging six lottery jackpots in five states to try to gain more than $19 million, reports Josh Elliott of CBS News' digital network, CBSN.

"This is new to me. In my career, I have not seen anything quite like this," said Iowa Division of Criminal Investigation Assistant Director David Jobes.

After Eddie Tipton was convicted in July, police received a tip about his brother Tommy, who purchased winning tickets in Colorado in 2005 and Oklahoma in 2011.

"That is a flag, of course, when you have the same individual winning fairly significant jackpots in more than one state," Jobes said.

The trail led them to other suspicious jackpots in Kansas and Wisconsin, where an important clue was found.

Unlike Mega Millions and Powerball - which use ball machines in their drawings - the Tipton brothers allegedly targeted lotteries where winning numbers were selected by computers.

Prosecutors say they discovered unauthorized codes on the computer in Wisconsin during drawings that fell on certain dates and times. The codes directed the computer not to randomly generate numbers, but instead to use an algorithm whose results could be predicted.

Eddie Tipton, a former security director at the Multi-State Lottery Association, had helped build the computer.

The alleged scheme sounds like a Hollywood thriller to information security expert, Snoopwall CEO Gary Miliefsky.

"The movie plot would be employee gets security job to help protect a lottery system, figures out a way to hack the random algorithm so that he can win the lottery and he can pass those winnings on to his relatives multiple times," Miliefsky said. "It's pretty ingenious if you think about it."

Police believe Eddie Tipton is the man seen in a surveillance video buying the winning Hot Lotto ticket in 2010. At the time, he worked in the secure room where winning numbers were selected electronically.

"I wouldn't run a lottery system off a computer to begin with. Going back to those numbered balls in a vacuum is probably a better solution," Miliefsky said.

The brothers are currently out on bond. Police suspect there could be even more instances of alleged fraud.

Eddie Tipton's lawyer told "CBS This Morning" his client is confident he will eventually be exonerated.

Tommy Tipton's attorney said his client will plead not guilty.

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