Massachusetts Father And Son Found Guilty Of Lottery Scam$20 Million In Tickets Fraudulently Claimed: Feds |
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A father and son were convicted by a federal jury on Dec. 9 in connection with a “ten-percenting” scheme in which they cashed winning Massachusetts state lottery tickets on behalf of the ticket holders to avoid taxes and receive tax refunds.
Ali Jaafar, 63, and Yousef Jaafar, 29, both of Watertown, were convicted of one count of conspiracy to defraud the Internal Revenue Service, one count of conspiracy to commit money laundering and one count each of filing a false tax return. U.S. District Court Judge Nathaniel Gorton scheduled sentencing for April.
Mohamed Jaafar, another of Ali Jaafar’s sons, who was also involved in the scheme, previously pleaded guilty to conspiracy to defraud the Internal Revenue Service and is scheduled to be sentenced in March.
The defendants conspired with others to purchase winning lottery tickets at a cash discount from gamblers all over Massachusetts, often using convenience store owners to facilitate the transactions. This scheme—referred to as “ten-percenting” because the ticket purchasers typically keep between 10-20 percent of each ticket’s value—allows the real gamblers to avoid reporting the winnings on their tax returns.
The defendants and co-conspirators then presented the winning tickets to the Massachusetts Lottery Commission as their own and collected the full value of the tickets. The defendants also reported the ticket winnings as their own on their income tax returns and claimed fake gambling losses to offset the claimed winnings, thereby avoiding federal income taxes and receiving tax refunds.
Between 2011 and 2020, the defendants and their co-conspirators cashed more than 14,000 lottery tickets and claimed more than $20,000,000 in Massachusetts lottery winnings. In total, the three family members received more than $1,200,000 in tax refunds by claiming other peoples’ lottery tickets as their own and then offsetting those winnings with fake gambling losses on their tax returns.
The charge of conspiracy to defraud the IRS provides for a sentence of up to five years in prison, three years of supervised release, a fine of $250,000 or twice the gross gain or loss, whichever is greater, and restitution. The charge of conspiracy to commit money laundering provides for a sentence of up to 20 years in prison, three years of supervised release, a fine of $500,000 or twice the value of the property involved in the transaction, whichever is greater, restitution and forfeiture.
Additionally, the charge of filing false tax returns provides for a sentence of up to three years in prison, one year of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater.
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