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AG Derek Schmidt: Settlements reached with two individuals for presenting false claims to the Kansas Lottery

Release Date: Jun 20, 2018

TOPEKA – (June 20, 2018) – Settlements have been reached with two individuals accused of submitting false or fraudulent claims for payment to the Kansas Lottery in the form of rigged, winning lottery tickets, Kansas Attorney General Derek Schmidt said today. 

Last year, Schmidt filed suit against three individuals accused of making false claims. The defendants are Eddie Tipton, Amy Demoney and Christopher McCoulskey. Tipton is a former computer-security official with the Multi-State Lottery Association.

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 alleged, 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.

Shawnee County District Court Judge Franklin R. Theis this week ordered Demoney to pay damages to the Kansas Lottery in the amount of $9,402.80 and $5,000.00 in civil penalties and costs and attorney fees. McCoulskey was ordered to pay damages to the Kansas Lottery in the amount of $7,402.80 and $6,597.20 in civil penalties and costs and attorney fees. Both defendants are paying damages in the amount they collected from the Kansas Lottery and retained after giving a portion of the winnings to Tipton.

Tipton was prosecuted criminally in Iowa for criminal conduct involving manipulation of multi-state software in Iowa and Wisconsin. As part of a plea agreement in that case, Tipton agreed to repay funds collected from the Kansas Lottery. Tipton is currently serving a prison sentence pursuant to that Iowa criminal case, and Schmidt’s false claims lawsuit against Tipton is ongoing.

Copies of the consent judgments can be found at www.InYourCornerKansas.org/judgments

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