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AG Derek Schmidt sues three individuals for submitting false claims to Kansas Lottery

Release Date: Mar 14, 2017

TOPEKA – (March 14, 2017) – Kansas Attorney General Derek Schmidt has filed suit against three individuals accused of submitting false or fraudulent claims for payment to the Kansas Lottery in the form of rigged, winning lottery tickets. 

In a lawsuit filed last month, Schmidt asked the Shawnee County District Court to order Eddie Raymond Tipton, Amy Demoney and Christopher McCoulskey to repay a total of about $44,000 they received from redeeming lottery tickets that “won” as the result of Tipton’s manipulation of number-generating software through the multi-state lottery. Tipton, a former computer-security official with the Multi-State Lottery Association, also faces criminal charges in Iowa related to his alleged manipulation of multi-state lottery software. The Kansas lawsuit was served on the defendants last week.

In the lawsuit, Schmidt alleges that in December 2010, Tipton purchased two lottery tickets from gas stations in Overland Park and Emporia, which he then gave to Demoney and McCoulskey to present for payment. Those tickets, the lawsuit alleges, had been rigged to win by Tipton’s software manipulation at the multi-state lottery. In February and June of 2011, Demoney and McCoulskey submitted the tickets to the Kansas Lottery, and were paid a total of $44,008 for the “winning” tickets. They then gave a portion of the proceeds to Tipton.

In addition to seeking repayment of the moneys paid for the rigged winning tickets, the lawsuit asks the court to impose civil penalties for violations of the Kansas False Claims Act.

Neither Tipton nor the Multi-State Lottery Association had direct access to the Kansas Lottery’s internal gaming system. The Kansas Lottery has conducted an internal analysis and investigation into whether Tipton’s activities otherwise affected the Kansas Lottery or its players. Those investigations revealed no indications that Tipton affected the Lottery’s internal systems, security of its games, or manipulated any internal drawings performed by the Kansas Lottery.

In 2009, the Kansas Legislature enacted the Kansas False Claims Act, giving the attorney general authority to file suit against individuals or entities that submit false or fraudulent claims for payment to a state agency or local government. As a member of the Kansas Senate at the time, Schmidt was one of the original proponents of creating a false claims act in Kansas. 

A copy of the lawsuit can be found here: http://bit.ly/2mshhD1.  

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