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Lottery group settles with winner who sought bigger prize

A national lottery group rocked by an insider’s jackpot-rigging conspiracy has agreed to settle a lawsuit brought by a winner who said his $9 million prize should have been larger

News headlines today: Nov. 24, 2020

IOWA CITY, Iowa — A national lottery group rocked by an insider’s jackpot-rigging conspiracy said Monday it has settled a lawsuit brought by an Iowa grandfather who alleged that a $9 million prize he won in 2011 should have been nearly three times as big.

The Multi-State Lottery Association and Larry Dawson informed a judge of the settlement this month, cancelling a trial that was scheduled to begin next week in Des Moines, Iowa. The terms of the deal are confidential.

“He’s relieved that it’s over,” Dawson’s attorney, Nicholas Mauro, said.

Dawson, a financial adviser who lives in Webster City, Iowa, won a $9 million Hot Lotto jackpot in 2011. He happily claimed the $6 million pre-tax cash payout, surrounded by his wife, children and grandchildren.

But years later, he learned that the game’s previous $16.5 million jackpot had been rigged by Eddie Tipton, the lottery association’s information security director, in a massive fraud.

Dawson, 66, sued in 2016 alleging that the $16.5 million should have carried over to the prize he won under Hot Lotto’s rules. His lawsuit sought $10 million — the size of the lump sum cash option — plus interest.

The settlement is the second in recent months to resolve legal claims alleging that the association’s lax security allowed Tipton’s fraud to occur and cheated players. The association agreed to pay $4.3 million to settle a class-action lawsuit, giving refunds to players who purchased tickets for tainted drawings between 2005 and 2013.

A statement issued by the association said the group and its insurance carrier “decided to settle the case to avoid additional litigation expenses.” The group said the agreement “contains a confidentiality clause that prevents either party from discussing the terms or releasing it.”

Settlement agreements involving government bodies are public records under Iowa law. But it’s not clear how that law would apply to the association, a nonprofit that is owned by 38 state and territorial lotteries.

In resolving his case, Dawson dismissed claims against the Iowa Lottery. That agency and the Iowa attorney general’s office said they don’t have copies of the settlement.

Iowa Lottery CEO Matt Strawn said no state or Iowa lottery money will fund the settlement.

“The settlement between the Multi-State Lottery Association and Mr. Dawson closes a chapter in lottery history that tested” the integrity of lottery games, he said. Iowa officials “passed this test” by investigating, uncovering and prosecuting Tipton’s fraud, Strawn said.

Tipton secretly installed code in software used by lotteries that allowed him to predict winning number combinations on certain days of the year. For years, he worked with his brother and other associates to purchase winning tickets and claim prizes around the country. A judge sentenced him in 2017 to up to 25 years in prison.

Tipton’s downfall began after he purchased a winning ticket for the $16.5 million Hot Lotto jackpot at a gas station near the association’s office in December 2010. Stunned colleagues identified him as the buyer after investigators released surveillance footage of the purchase years later. Tipton passed the ticket to associates but the Iowa Lottery refused to pay after lawyers for a trust declined to reveal who bought the winning ticket.

The money ultimately went back to the 16 states that operated the Hot Lotto as an “unclaimed prize.” Dawson’s lawsuit alleged that the jackpot should have carried forward and that states shouldn’t receive a windfall for failing to operate a fair and secure game.

Iowa Lottery’s previous CEO, Terry Rich, accused Dawson of trying to “rewrite history,” saying it was impossible to know what would have happened if the prize had carried over.

Dawson — nicknamed “Lucky Larry” for his golf game — said he bought $19 in tickets for every bi-weekly draw so he could cover all 19 “Hot Ball” options, after reading a book claiming to have the secrets to winning lotteries.

A national lottery group rocked by an insider’s jackpot-rigging conspiracy has agreed to settle a lawsuit brought by a winner who said his $9 million prize should have been larger

H-1B Lottery Lawsuit

The Random Computer Generated H-1B Lottery is unfair and the lawsuit to end the lottery is underway

H-1B Lottery Lawsuit

The H-1B Lottery is unfair. We all know it. In the case of Walker Macy LLC. v. USCIS, employers and employees sued the government to end the current random lottery process in place for H-1B cap subject petitions. The federal court, however, denied the request to end the lottery on March 17, 2017. The case was appealed to the Ninth Circuit Court of Appeals, but has now been voluntarily dismissed. The case was dismissed because after filing the appeal, the lead plaintiffs were selected in the lottery, making their appeal moot, and because no other employer was willing to become lead plaintiff in their stead. Without an employer willing to appeal this issue, the case could not proceed.

The purpose of the class action lawsuit was to allow those with rejected H-1B petitions the opportunity to re-submit petitions and receive a place in line ahead of those who file for the first time at a later date. This remedy would have provided “priority” for next fiscal year’s H-1B numbers to those who had filed for an H-1B previously, and were not selected in the random lottery. Now, however, the lottery will continue unless Congress acts to change it. Our BLOG POST describes the issue. (the case was previously called Tenrec, Inc. v. USCIS until two of the plaintiffs left the lawsuit, leaving Walker Macy and Xiaoyang Zhu as plaintiffs and proposed class representatives).

Press inquiries: (503) 597-7190 Brent Renison, lead counsel.

Below we post the legal filings in the case so that those who are victims of the H-1B computer generated random lottery can stay informed and become educated about the issues in this case:

June 9, 2016 – We are seeking declarations from INDIVIDUALS and COMPANIES to support the class action motion. Completed and signed declarations can be scanned/converted to PDF and submitted by email to attorney Brent Renison: brent at entrylaw dot com.

June 29, 2016 – FIRST AMENDED COMPLAINT FILED to add claim for failure to act under the Administrative Procedure Act.

July 7, 2016 – MOTION FOR CLASS CERTIFICATION FILED. In this motion, the plaintiffs ask to be allowed to represent the class of employers and employees harmed by the H-1B lottery.

July 7, 2016 – MOTION FOR SUMMARY JUDGMENT FILED. In this motion, the plaintiffs ask to have the Court rule in plaintiffs favor and provide for an orderly priority date system instead of a random lottery.

July 22, 2016 – Based on the parties agreement, the Court ordered an extension of the deadline for the government to respond to the Motion for Summary Judgment and the Motion for Class Certification. Now, the deadline is September 2, 2016, and the government must respond to the complaint by August 8, 2016.

August 8, 2016 – DEFENDANTS’ MOTION TO DISMISS FILED. The U.S. Government filed a motion to have the lawsuit thrown out over jurisdictional issues. Plaintiffs will respond to the motion next.

August 15, 2016 – PLAINTIFFS’ RESPONSE IN OPPOSITION TO MOTION TO DISMISS FILED. The plaintiffs responded to the Motion to Dismiss by asking the Court to deny the U.S. Government’s request to throw out the lawsuit, and to allow the case to move forward.

September 1, 2016 – DEFENDANTS’ REPLY IN SUPPORT OF DEFENDANTS’ MOTION TO DISMISS. The defendants replied to the plaintiffs’ response. This filing concludes the briefing allowed under federal rules, although defendants have asked for oral argument which could result in a hearing set by the court.

September 2, 2016 – UPDATE: The attorneys for the government filed a request for the Court to put the Summary Judgment and Class Motions on hold until the Court decides the Motion to Dismiss the lawsuit, and the Court granted their request. Now, the Court will first decide the government’s Motion to Dismiss before proceeding with the plaintiffs’ motions. Oral argument on the Motion to Dismiss was set for a telephonic hearing on September 14, 2016. We do not expect a ruling on the Motion to Dismiss until after this hearing, so there will not likely be any updates posted here until that time or after.

September 22, 2016 – ORDER DENYING GOVERNMENT’S MOTION TO DISMISS. The Honorable Judge Simon denied the government’s motion to dismiss the lawsuit, allowing the case to proceed. The Court set a hearing for December 19, 2016 at 2pm, at which time the attorneys will argue the merits of the case and ask the Court for a decision. The briefs in support of summary judgment will be posted here as they are filed in advance of that hearing. The Court is not expected to issue a ruling at the December 19 hearing, but will most likely issue a decision at a later date.

September 26, 2016 – SECOND AMENDED COMPLAINT. In the Court’s Order denying the government’s motion to dismiss, the Court allowed plaintiffs the opportunity to amend the complaint to make explicit allegations that the employer plaintiffs still seek to employ the individual plaintiffs and the individuals still seek to be employed. The Second Amended Complaint adds these allegations.

October 14, 2016 – Government filed its ANSWER to the complaint.

October 17, 2016 – Plaintiffs filed a CROSS MOTION FOR SUMMARY JUDGMENT requesting the court rule in Plaintiffs’ favor.

October 21, 2016 – Government Defendants filed a CROSS MOTION FOR SUMMARY JUDGMENT requesting the lottery be upheld.

November 8, 2016 – Plaintiffs filed a RESPONSE TO DEFENDANTS MOTION FOR SUMMARY JUDGMENT asking the Court to deny the government’s request.

November 14, 2016 – Government Defendants filed a RESPONSE TO PLAINTIFFS MOTION FOR SUMMARY JUDGMENT asking the court to deny Plaintiffs’ request.

December 2, 2016 – Government Defendants filed a REPLY TO PLAINTIFFS RESPONSE TO DEFENDANTS MOTION FOR SUMMARY JUDGMENT. This concludes briefing of the parties’ Cross Motions for Summary Judgment.

December 19, 2016 – Legal counsel for Plaintiffs, Brent Renison, and for Defendants, Joshua Press, argued the case before the Honorable Judge Michael Simon. Judge Simon heard the arguments and provided until January 6, 2017 for either or both parties to submit an additional supplemental brief, after which time the case will be “taken under advisement.” This means that a decision on the Cross Motions for Summary Judgment will be issued in a written opinion after January 6, 2017.

December 20, 2016 – Plaintiffs filed a SUPPLEMENTAL BRIEF as allowed by the Court during oral argument.

January 6, 2017 – Defendants filed a SUPPLEMENTAL BRIEF. The case is now under advisement and a decision could be issued at any time. We now await the Court’s ruling.

February 7, 2017 – As we await the Court’s ruling, and simultaneously prepare H-1B petitions for the April 2017 cap season, this 2017 H-1B CAP FILING ADVISORY may be of some help in planning this years’ petition filings.

February 13, 2017 – Plaintiffs Tenrec, Inc. and Sergii Sinienok filed a motion to be dismissed from the lawsuit, which was granted by the Court. Plaintiffs Walker Macy LLC and Xiaoyang Zhu continue to represent the putative class members and continue with the lawsuit.

March 8, 2017 – Plaintiffs filed a MOTION FOR PRELIMINARY INJUNCTION requesting that Defendants not be allowed to distribute H-1B visas by random lottery system until a decision on the case can be made.

March 17, 2017 – ORDER DENYING PLAINTIFFS MOTION FOR SUMMARY JUDGMENT issued by the Court. The Plaintiffs have lost the lawsuit to end the lottery. Plaintiffs have 30 days to appeal to the Ninth Circuit Court of Appeals.

April 4, 2017 – NOTICE OF APPEAL filed by Plaintiffs requesting appellate review before the Ninth Circuit Court of Appeals.

June 21, 2017 STIPULATED MOTION FOR VOLUNTARY DISMISSAL OF APPEAL filed by all parties. This was due to the lead plaintiffs winning the lottery the second time around, and the fact that no other employer was willing to become the lead plaintiff in the lawsuit.

June 23, 2017 ORDER of dismissal in Ninth Circuit Court of Appeals based on the parties stipulated motion for voluntary dismissal.

The Random Computer Generated H-1B Lottery is unfair and the lawsuit to end the lottery is underway