State v. Tipton

Decision Date23 June 2017
Docket NumberNo. 15-1515,15-1515
Parties STATE of Iowa, Appellee, v. Eddie TIPTON, Appellant.
CourtIowa Supreme Court

897 N.W.2d 653

STATE of Iowa, Appellee,
Eddie TIPTON, Appellant.

No. 15-1515

Supreme Court of Iowa.

Filed June 23, 2017
Rehearing Denied July 13, 2017.

Dean Stowers of Stowers & Sarcone, PLC, West Des Moines, for appellant.

Thomas J. Miller, Attorney General, and Louis Sloven, Kevin Cmelik, and Robert Sand, Assistant Attorneys General, for appellee.

APPEL, Justice.

In this case, Eddie Tipton challenges his felony convictions on two lottery-related offenses. The convictions arose out of the drawing of a Hot Lotto jackpot winner with a prize of $16.5 million on December 29, 2010. The State claimed Tipton engaged in a technologically sophisticated 21st Century crime, while the defense characterized the State's version of events as derived from Mission: Impossible .1

On January 15, 2015, over four years after the lottery drawing in question, the State charged Tipton with fraudulently passing or redeeming, or attempting to pass or redeem, a lottery ticket in violation of Iowa Code section 99G.36(1) (2011). The State also charged Tipton with influencing or attempting to influence the winning of the prize through fraud, deception, or tampering with lottery equipment or materials in violation of Iowa Code section 99G.36(2).

Tipton moved to dismiss both charges, arguing they were untimely because the three-year statute of limitations provided in Iowa Code section 802.3 had expired. The district court denied the motion. According to the district court, both the fraudulent passing or redeeming and the tampering charges against Tipton were continuing offenses under Iowa Code section 802.7. The last act of the offenses, according to the district court, occurred on January 17, 2012. As a result, the district court reasoned, the fraudulent passing and redeeming and the tampering charges were timely brought on January 15, 2015.

In the alternative, the district court concluded the one-year fraud extension of the statute of limitations provided in Iowa Code section 802.5 applied to the charges. The court concluded both crimes involved fraud, and as a result, the statute of limitations could be extended for one year after the State discovered or should have discovered the crimes. The court further reasoned discovery occurs only when the State knew or should have known there was probable cause that Tipton committed the offenses. The court found the State developed probable cause that Tipton was involved in the crimes only after the State released a video of the person who purchased the winning ticket online in October 2014, and Tipton was identified as a suspect by a lottery employee in Maine who watched the video. The court further found the State exercised reasonable diligence in its investigation and discovery of Tipton's involvement in the crimes. As a result, the court concluded on this alternate ground that the State timely initiated its prosecution against Tipton.

A jury convicted Tipton of both the fraudulent passing or redeeming and the tampering charges. Tipton appealed, claiming his prosecution on both charges was barred by the three-year statute of limitations, the jury's verdict on both charges was not supported by substantial evidence, the trial court made prejudicial errors in

897 N.W.2d 662

the admission of evidence, and the jury was improperly instructed on various issues.

We transferred the case to the court of appeals. The court of appeals ruled that the fraudulent passing, redeeming, and tampering charge was not a continuing offense under Iowa Code section 802.7. With respect to the one-year extension of the statute of limitations for fraudulent acts under Iowa Code section 802.5, the court held the State was on notice of fraudulent passing or redeeming as early as November, and no later than December 29, 2010, when the lottery ticket was presented for payment. As a result, even if the one-year extension applied, the fraudulent passing or redeeming charge was untimely.

With respect to the tampering charge, however, the court of appeals came to a different conclusion. The court concluded the tampering was only discovered in October 2014, and as a result, the tampering charge was timely. Because the evidence regarding discovery was undisputed, the court concluded no jury issue was present.

Turning to other issues, the court of appeals held there was substantial evidence to support the jury's verdict on the tampering charge. The court also found no reversible error in the evidentiary ruling and jury instruction issues related to the tampering charge.

Tipton sought further review, which we granted. For the reasons expressed below, we vacate the decision of the court of appeals and affirm in part and reverse in part the judgment of the district court.

I. Factual and Procedural Background.

A. Events Leading to Filing of Charges.

The Iowa Lottery (lottery) offers a multistate lottery game called "Hot Lotto." Winning numbers are selected by one of two random number generator (RNG) computers. Prior to each drawing, officials flip a coin to determine which RNG computer will be used to select the winners for that drawing.

Winning Hot Lotto tickets must be claimed within a year of purchase or the prize is forfeited. Iowa Code § 99G.31(2)(b ), (d ) ; Iowa Admin. Code r. 531—11.2 (2010); id. § 531—20.13; Iowa Lottery, Iowa Lottery Game Specific Rules: Hot Lotto r. 531—20.13, at 5 (Dec. 31, 2007), https:// The lottery will not pay the prize on a winning ticket if the ticket was not validly purchased, legally presented, or legally possessed or acquired. Iowa Code § 99G.31(2)(e ) ; Iowa Admin. Code r. 531—11.3.

On December 23, 2010, someone purchased a Hot Lotto ticket from a Des Moines convenience store and won the jackpot of the Hot Lotto drawing on December 29. The Hot Lotto jackpot for that drawing was $16.5 million. The lottery knew where and when the winning ticket was purchased because of its tracking system. Video and audio equipment at the convenience store recorded the purchase of the winning ticket.

No one presented the ticket and attempted to claim the prize until November 2011. On November 10, Phillip Johnston, a resident of Quebec, Canada, contacted the lottery and claimed he bought the winning ticket. While Johnston was able to provide the lottery with the fifteen-digit security number printed on the back of the ticket, he provided details of the purchase to the lottery that did not match the video and audio recording of the purchaser. The lottery did not pay the prize to Johnston.

897 N.W.2d 663

On December 6, Johnston admitted he was not the owner of the ticket and instead represented an anonymous owner. Johnston discussed with the lottery whether the ticket could be claimed through a Belizean blind trust, Hexham Investments Trust. The trustee for Hexham was New York attorney Crawford Shaw. Johnston was president of Hexham Investments, Ltd., the primary beneficiary of the trust.

On December 29, Julie McClean, a local attorney representing Shaw, presented the winning ticket along with a winning claim form to lottery officials. The ticket and claim were submitted on behalf of the trust and the ticket was signed by Shaw in his capacity as trustee for the trust. The ticket was submitted a little more than one hour before the lottery's one-year deadline. From December 29 on, the winning ticket remained in possession of lottery officials.

Shaw and McClean met with lottery officials on January 17, 2012. The purpose of the meeting was to find a resolution to get the claim paid. According to McClean,

Our position was that the trust had presented all of the information that was available to it to satisfy the requirements of the Iowa Lottery Authority, and that they had their own investigative powers and other means to satisfy their other requirements.

While recognizing the regulatory powers of the lottery, McClean and Shaw took the position that the lottery could pay out the claim based on information provided, together with other information which would be available through the lottery's security protocols. McClean and Shaw also suggested the money could be paid to charity.

The lottery declined to pay the prize. On January 26, local counsel for Shaw sent the lottery a letter unconditionally withdrawing the claim of ownership of the lottery ticket.

The lottery asked the Iowa Division of Criminal Investigation (DCI) to help investigate claims for the winning lottery ticket on November 15, 2011. The DCI interviewed Johnston in Quebec City, Canada. After they interviewed Johnston, DCI agents traveled to Houston, Texas, in an attempt to interview Robert Sonfield and Robert Rhodes. Over a three-day period, DCI agents made various attempts to talk with Sonfield and Rhodes but were unsuccessful.

On October 9, 2014, the DCI released a portion of the video and audio recording of the purchase of the winning ticket at the Des Moines convenience store in the hopes of receiving a tip as to the identity of the purchaser. On October 15, the DCI received a tip from an employee of the Maine lottery that Edward Tipton was the purchaser.

Tipton was a security expert employed by the...

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