Monthly Archives: November 2015

Blog, Criminal, Legal News

Convicted Iowa lottery scammer also may have rigged games in Oklahoma

1 Comment

by Randy Ellis

A former lottery security director convicted of rigging a multistate Hot Lotto game in a failed effort to claim a $16.5 million jackpot in Iowa also is under investigation on allegations of fixing games involving winning lottery tickets in Oklahoma, Wisconsin and Colorado.

An Iowa assistant attorney general revealed convicted lottery scammer Eddie Tipton’s Oklahoma connection in an Iowa court hearing Thursday but said details of the allegation were contained in sealed court documents, and he could not discuss them, The Associated Press reported.

Rollo Redburn, executive director of the Oklahoma Lottery Commission, confirmed Friday that Oklahoma lottery authorities have been assisting the Iowa attorney general’s office and the Iowa Division of Criminal Investigations with their ongoing criminal investigation.

Information forwarded to Iowa authorities included evidence relating to a winning Hot Lotto ticket purchased Nov. 21, 2011, in Idabel, Redburn said.

The Oklahoma winning jackpot had a value of $1.2 million if paid out over time through an annuity and an immediate cash value of $907,715, Redburn said. The winner chose to take the immediate cash, minus taxes that were withheld. The drawing was on Nov. 23, 2011, and the money was paid out on Dec. 21, 2011, Redburn said.

Redburn declined to say what connections the purchaser of the ticket may have had to Tipton, saying it was part of a continuing investigation.

Aaron Cooper, spokesman for Oklahoma Attorney General Scott Pruitt, said attorneys in Pruitt’s office are aware of the alleged Oklahoma ties to Tipton’s criminal activity and are in communication with the Iowa attorney general’s office as its investigation and prosecution continue to unfold.

“The Oklahoma attorney general’s office will continue to closely monitor the situation to determine any steps that would be necessary to address any unlawful activity that may have occurred within this state,” Cooper said.

Other cases

Tipton, 52 of Flatonia, Texas, was convicted of fraud in July by a jury in Des Moines, Iowa, for rigging a 2010 Iowa Hot Lotto game that carried a $16.5 million jackpot. He received a 10-year sentence, which he is appealing, The Associated Press reported.

Authorities became suspicious when the prize initially went unclaimed for almost a year and then efforts were made to hide the identity of the winner, something that is not permissible under Iowa law.

Tipton was an information technology security worker at the Multi-State Lottery Association, an Iowa-based lottery security agency that provides the computers used to randomly generate numbers for lottery drawings in several states. In 2013, he became the information security director.

It was part of Tipton’s job to help build the random number generators sent out to various states, The Associated Press reported.

In the Iowa case, prosecutors accused Tipton of using stealth software to rig the numbers for the December 2010 Hot Lotto drawing. Prosecutors alleged Tipton then bought a ticket with the winning numbers he had built into the system, even though Iowa rules prohibited him from playing since he was an employee of a lottery vendor.

Tipton also is suspected of rigging a November 2005 lottery in Colorado and a 2007 lottery in Wisconsin.

Tipton’s brother, Tommy Tipton, submitted a claim for the winning ticket with the help of a friend in the Colorado lottery, an investigator said in a sworn statement.

That lottery had a $4.5 million jackpot, and Tommy Tipton took a lump sum payment of $568,990 for his share of the jackpot. He paid his friend about 10 percent for claiming the winnings on his behalf, the investigator said.

In the Wisconsin Megabucks lottery case, Eddie Tipton’s close friend Robert Rhodes of Houston, Texas, used a limited liability company to submit a winning ticket claim, the investigator said.

The limited liability company was given a lump sum payment of $783,257.72 for the winning ticket. The jackpot at the time was $2 million, authorities said.

Opening eyes

Redburn said Oklahoma lottery officials do everything possible to keep games honest, and there is no way to go back and make things right for people who may have been cheated out of an honest game four years ago.

“There’s nothing you can do about it now,” he said.

“You can’t protect against bad people,” he said. “We’ve always got to be diligent about the possibility of fraud. What this has done, I think, is open the eyes of a lot of people to try to tighten things up a bit.”

“I’d say right now the games are probably as protected as they can get,” Redburn said. “If you asked me, I’d say that the games are safe. Play and the numbers are going to be picked appropriately, and you’re going to win or you’re not going to win based on fat chance.”

Full Article – http://newsok.com/article/5461927

Blog, Criminal, Legal News, Supreme Court

Police used apparently illegal wiretaps to make hundreds of arrests

Brad Heath and Brett Kelman, USA TODAY

RIVERSIDE, Calif. — Prosecutors in the Los Angeles suburb responsible for a huge share of the nation’s wiretaps almost certainly violated federal law when they authorized widespread eavesdropping that police used to make more than 300 arrests and seize millions of dollars in cash and drugs throughout the USA.

The violations could undermine the legality of as many as 738 wiretaps approved in Riverside County, Calif., since the middle of 2013, an investigation by USA TODAY and The Desert Sun, based on interviews and court records, has found. Prosecutors reported that those taps, often conducted by federal drug investigators, intercepted phone calls and text messages by more than 52,000 people.

Federal law bars the government from seeking court approval for a wiretap unless a top prosecutor has personally authorized the request. Congress added that restriction in the 1960s, when the FBI had secretly monitored civil rights leaders, to ensure that such intrusive surveillance would not be conducted lightly.

In Riverside County — a Los Angeles suburb whose  court and prosecutors approved almost one of every five U.S. wiretaps last year — the district attorney  turned the job of reviewing the applications over to lower-level lawyers, interviews and court records show. That practice almost certainly violated the federal wiretapping law and could jeopardize prosecutors’ ability to use the surveillance in court.

“A district attorney is playing with gunpowder if he ignores the potential implications of letting somebody else handle the entire process. That’s potentially catastrophic,” said Clifford Fishman, a Catholic University of America law professor who studies wiretapping.

That also  creates a legal problem for Riverside’s massive wiretapping operation, which had  come under scrutiny from Justice Department lawyers. Last week, USA TODAY and The Desert Sun reported that the U.S. Drug Enforcement Administration had secretly helped turn the county into the nation’s wiretap capital, even though federal prosecutors repeatedly warned that the surveillance orders violated a separate part of the wiretapping law and would not withstand a legal challenge.

Federal drug agents used information from Riverside wiretaps to make arrests as far away as Kentucky and Virginia, sometimes concealing the surveillance from judges and defense lawyers.

Wiretaps in Riverside more than quadrupled under the county’s former district attorney, Paul Zellerbach, who left office in January. Despite a federal court ruling that only the district attorney himself should usually approve wiretaps, Zellerbach said in two interviews over the past month that he could not recall having reviewed or personally authorized any of the county’s wiretap applications and said he was unaware of the details of the requests. Instead, he said, he delegated that job to one of his assistants.

“I didn’t have time to review all of those,” Zellerbach said. “No way.”

Because wiretap applications are secret, it is difficult to gauge how often they were approved by other lawyers. A report based on information Zellerbach’s office submitted to federal court administrators lists an assistant, Jeffrey Van Wagenen, as the person who authorized nearly all of the county’s wiretap applications. Van Wagenen’s signature appears on a sealed wiretap application approved last year by a Riverside County judge and obtained by USA TODAY. Van Wagenen, who left the office last year, said it would be inappropriate for him to comment.

Delegating that job poses a legal problem because federal law — which regulates wiretap applications even in state courts — carefully restricts who must approve a surveillance request. The U.S. Supreme Court ruled in 1974 that those restrictions were serious enough that it threw out wiretap evidence in a drug case because the surveillance had been approved by the wrong senior official at the U.S. Justice Department.

The federal 9th Circuit Court of Appeals reiterated that point in 2013 after federal prosecutors sought to use evidence from a wiretap police obtained from a state court in San Bernardino County, just north of Riverside. The prosecutor who signed off on the wiretap was not the county’s district attorney, Mike Ramos, but one of his deputies. That, the appeals court ruled, wasn’t good enough: Wiretaps had to be signed by the district attorney himself unless he had turned over all of his powers to someone else while he was away from the office.

Read Full Article – http://www.usatoday.com/story/news/2015/11/19/riverside-county-wiretaps-violated-federal-law/76064908/

Blog, Civil Rights, Immigration, International, Legal News, Supreme Court

The Legal Definition Of A Refugee, Which Obama Pays No Attention To

JV DeLong ,

CONTRIBUTOR

A puzzlement about the debate over accepting 10,000 Syrian refugees next year and more in the future is the lack of discussion of a fundamental point: Does Obama have the legal authority to order their admission to the U.S. as a humanitarian measure?

The answer is “no.”

The dictionary definition of a “refugee” is “a person who flees for refuge or safety, especially to a foreign country, as in time of political upheaval, war, etc.”

This definition underlies most of the media discussions of the Syrian situation, with its emphasis on the humanitarian crisis, which is indeed horrendous. The definition also underlies the President’s uncontested authority to provide humanitarian assistance to refugees outside of the United States if he believes that such assistance will “contribute to the foreign policy interests of the United States.” [22 U.S.C. sec 2601(b)(2)] The U.S. has already spent over $4 billion on Syrian relief under this authority.for this purpose.

However, the meaning of “refugee” in U.S. immigration law is narrower than this dictionary definition.

In immigration law, for purposes of admitting someone to the U.S., the crucial factor is whether a person has a legitimate fear of persecution, not whether a humanitarian crisis exists. By statute [8 U.S.C. Sec.1101(42)], a “refugee” is: “any person who is outside any country of such person’s nationality . . . and who is unable or unwilling to return to . . . that country because of persecution or a well-founded fear of persecution on account of race, religion, nationality, membership in a particular social group, or political opinion…”

The statute then stretches this definition to include a person who is within his own country but who has the requisite fear of persecution. But the status of “refugee” can be granted only under “special circumstances” specified by the president. And before determining that special circumstances exist, the president must “consult,” in the form of in-person discussions between cabinet rank officials and members of the House and Senate Judiciary committees concerning all aspects of the situation. No agreement is necessary; just consultation [8 U.S.C. Sec. 1157(e)].

Section 1157 also provides for caps on the number of refugees admitted each year, and for presidential estimates of the likely numbers at the beginning of each year.

Nothing in the stretched definition changes the basic requirement that a refugee be someone who has well-founded fear of persecution.

The current controversy started on September 10, when the administration announced via press briefing a plan to admit 10,000 Syrian refugees next year. The next step was a formal Presidential Determination on refugee levels for FY2016, which projected admission of 85,000 total. The word “Syria” does not appear in the Determination, and the goal of resettling 10,000 Syrians appears only in news reports and briefings, such as a WhiteHouse.gov memo by DHS on How We’re Welcoming Syrian Refugees While Ensuring Our Safety.

Neither the press briefing nor the Presidential Determination nor the DHS memo mentions the statutory criterion of fear of persecution, and it is unclear why 10,000 Syrians will meet the standard. The State Department’s Report to Congress reviewing the section 1157(e) factors and explaining the reasoning behind the estimates does not explain why Syrian refugees meet the criterion.

Read Full Article – http://www.forbes.com/sites/jvdelong/2015/11/19/syria-who-is-a-refugee/

Blog, Business Law, International, Legal News

Chris Odom: ‘Bitcoins are Not Under Legal Law, They’re Under Cryptographic Law’

By Kyle Torpey Nov 19, 2015 1:30 PM EST

Smart contract is a term that gets thrown around quite often in the Bitcoin community, but the reality is not many people truly understand why these types of cryptographic contracts are useful and secure. Smart contracts can come with varying levels of complexity, and one of the most widely-used smart contracts right now is a basic Bitcoin transaction. At the recent Bitcoin Investor Conference in Las Vegas, Stash Co-Founder Chris Odomexplained the key attribute of a smart contract that makes it different from a legal contract.

Smart Contracts Don’t Need a Court of Law

During his remarks on smart contracts, Chris Odom made it clear that the self-executing properties of these sorts of contracts are what separate them from the legal contracts that have been used in the past. He explained:

“The distinguishing factor of a smart contract is that it’s self executing. It executes on its own. You see, most contracts that people make in the legal world are contracts that are designed so that someday they have to be enforced in the court of law; they have to be legally enforced, and so they’re written that way. They’re written based on, you know, ‘We’re going to expect that if we have to enforce this it will be in a court of law, and therefore, all these terms are written based on that assumption.”

Odom also noted that the point of a smart contract is to — at least partially — avoid the legal system in its entirety. He explained that the preferred smart contracts are the ones that automate the enforcement of the contract and do not require the use of a court:

“The last thing you want on a [smart] contract is something saying that it’s enforceable in court. That, ‘Hey, if you use this smart contract, you’re going to end up in court!’ Who wants to sign that? That’s your worst nightmare. When I’m picking a smart contract, I want something that will securely flow the money properly according to its terms and will not land me in court.”

Smart Contracts Automate the Flow of Money

Another key point made by Odom during his presentation is that smart contracts are mostly about automating the flow of money between the parties associated with a particular contract. Instead of having a judge decide the outcome of a contract, a smart contract can automatically trigger a transfer of funds based on a set of parameters defined by computer code. Odom noted:

“A real smart contract is something that automates money flows. It does escrow; it does surety bonds; it does insurance. These are the sorts of things that we’re building with our smart contracts. They automate the money flow. The money goes in here; after so many days, it automatically goes over there, unless a dispute gets triggered, and then maybe an oracle has to come online — or a dispute mediator or arbitrator.”

Smart Contracts Operate Under Cryptographic Law

During his presentation, Chris Odom also told a short story about a lawyer who was recently trying to understand smart contracts and how they work. Odom told the lawyer there is one important statement that should be included in any smart contract:

“Here’s what you want to put in a smart contract. Here’s how you know when you’re writing a smart contract instead of a normal, legal contract. The first thing you put at the top of the contract is ‘This contract will not be enforceable in a court of law.’”

Odom claims the lawyer did not seem to understand the point of a contract that could not be enforced in a court of law, so he went on to describe his point in further detail:

“First of all, courts of law are not able to enforce these [contracts] anyway. Imagine that you’re in court, and there’s a judge, and she says, ‘I have ruled those bitcoins shall be moved to that address.’ But it doesn’t happen. Even though she has robes, a nice chair, and a bailiff with muscles, the bitcoins don’t move. You have to have the private key to move the bitcoins because bitcoins are not under legal law, they’re under cryptographic law. It’s a new form of law that’s coming into existence.”

In short, smart contracts do not require a court or a judge to be enforced. Not only do these types of contracts not operate within the current legal system, but as Odom explained, it is sometimes impossible to enforce the rule of law on what is essentially nothing more than computer code.

Kyle Torpey is a freelance journalist who has been following Bitcoin since 2011. His work has been featured on VICE Motherboard, Business Insider, RT’s Keiser Report, and many other media outlets. You can follow@kyletorpey on Twitter.

Full Article – http://insidebitcoins.com/news/chris-odom-bitcoins-are-not-under-legal-law-theyre-under-cryptographic-law/35915

Blog, Criminal, Drug Companies, Legal News

Legal Experts Urge Caution as Tribes Enter Pot Business

  • By MARY HUDETZ, ASSOCIATED PRESS

SANTA FE, N.M. — Nov 18, 2015, 10:47 PM ET

Tribes across the U.S. are finding marijuana is risky business nearly a year after a Justice Department policy indicated they could grow and sell pot under the same guidelines as states.

Federal raids on tribal cannabis operations in California followed by a South Dakota tribe’s move this month to burn its crop amid fears it could be next have raised questions over whether there’s more to complying with DOJ standards than a department memo suggested last December.

The uncertainty — blamed partly on thin DOJ guidelines, the fact that marijuana remains an illegal drug under federal laws, and a complex tangle of state, federal and tribal law enforcement oversight on reservations— has led attorneys to urge tribal leaders to weigh the risks involved before moving forward with legalizing and growing pot.

“Everybody who is smart is pausing to look at the feasibility and risks of growing hemp and marijuana,” said Lance Gumbs, a former chairman of the Shinnecock Tribe in New York and regional vice president of the National Congress of American Indians. “But are we giving up on it? Absolutely not.”

At a conference on tribal economic development held in Santa Fe, tribal leaders and attorneys said Wednesday that the raids have shown there may be more red tape for tribes to negotiate when it comes to legalizing cannabis than states have faced.

That’s especially the case for tribes that are within states where marijuana is not legal. In those cases, tribes may face the challenge of figuring out how to bring cannabis seeds onto reservations without crossing a state jurisdiction, and sheriffs and state officials are bound to be less approving of marijuana, said Blake Trueblood, director of business development for the National Center for American Indian Enterprise Development, host of the conference.

The DOJ memo sent to U.S. attorneys last December directed them not to prioritize prosecuting federal marijuana laws in most cases where tribes legalized the drug for medical or recreational use. The memo calls for tribes to follow an eight-point policy standard that includes taking measures to keep pot out of the hands of children and criminal networks, and not transport it across federal or state jurisdictions where it remains illegal.

“Industrial hemp, medical marijuana and maybe recreational marijuana present a lot of opportunity. But for now, the best advice is to proceed with caution,” said Michael Reif, an attorney for the Menominee tribe in Wisconsin, where tribal leaders filed a federal lawsuit Wednesday after federal agents recently destroyed hemp plants grown for research. “We’re seeing the ramifications of things being unclear in a way states didn’t.”

The Flandreau Santee Sioux in South Dakota — a state where marijuana isn’t legal — was the first to approve recreational pot under tribal law with a vote in June, and was one of the most aggressive about entering the industry, with plans to open the nation’s first marijuana resort on its reservation north of Sioux Falls.

But after weeks of discussions with authorities who signaled a possible raid, the tribe announced last week it had burned all of its marijuana plants. Anthony Reider, the tribe’s president, told The Associated Press the main holdup centered on whether the tribe could sell marijuana to non-Indians, along with issues over where the seed used for planting originated.

He suggested that by burning the crops, the tribe could have a clean slate to relaunch a grow operation in consultation with authorities.

In California, the Alturas and Pit River Indian rancherias’ marijuana operations were raided by federal authorities, with agents seizing 12,000 marijuana plants in July. The regional U.S. attorney’s office said in a statement that the two neighboring tribes planned to distribute the pot off tribal lands and the large-scale operations may have been financed by a foreign third-party.

It’s not clear if the two tribes have plans for new marijuana ventures, and calls from the AP were not immediately returned.

The California and South Dakota tribes are three of just about a half-dozen so far this year that have legalized medical or recreational marijuana on their reservations.

The Squaxin Island Tribe in Washington state is another, and just opened a store last week for retail sales of the drug. But most expect the tribe to face fewer legal challenges because Washington allows for recreational marijuana use and the tribe entered into a compact with the state that sets guidelines for taxing pot sales.

“The tribes are not going to be immune to what the local attitudes toward marijuana are going to be,” Trueblood said. “If there’s one 30,000-feet takeaway from this year, it’s that you’re not going to be successful if you don’t work with your local governments or U.S. attorneys.”

———

Follow Mary Hudetz on Twitter at http://twitter.com/marymhudetz. Her work can be found at http://bigstory.ap.org/journalist/mary-hudetz