Father and Son Who Won Lottery 14K Times Imprisoned for Fraud
Posted on: May 23, 2023, 04:51h.
Last updated on: May 24, 2023, 11:51h.
A father and son from Massachusetts who “won” the lottery more than 14K times saw their lucky streak end Monday. That’s when they were imprisoned for lottery fraud, money laundering, and tax evasion.
Ali Jaafar, 63, and Yousef Jaafar, 29, of Watertown were what’s known as “discounters,” or “10-percenters,” operating an industrial-scale ticket-cashing scheme that grossed $21 million in eight years. The Jaafars then lied on their tax returns to cheat the IRS out of around $6 million.
The duo purchased winning lottery tickets at a cash discount from gamblers across Massachusetts, building relationships with convenience store owners to facilitate these transactions, according to prosecutors.
In some states, authorities deduct federal tax or child support owed by lottery winners from wins over a certain threshold, which in Massachusetts is $600.
That’s why some winners sell their tickets to an underground ticket-cashing business, typically at a discount of 10%, hence “discounting” or “10-percenting.”
The state lottery commission is currently in the process of revoking or suspending the licenses of more than 40 lottery vendors who received commissions from the Jaafars for referring winners to their discounting business.
Convicted in December 2022, Ali Jaafar was sentenced to spend five years in a federal prison Monday, while his son received slightly more than four years. US District Judge Nathaniel M. Gorton also ordered the pair to pay $6 million in restitution and forfeit the profits from the business.
Elaborate Tax Fraud
The Jaafars first came to the attention of authorities in 2019, when the Massachusetts Lottery Commission (MGC) noticed Ali Jaafar was the top individual lottery ticket casher that year. His sons, Yousef and Mohammed, were third and fourth, respectively.
Mohamed Jaafar pleaded guilty to conspiracy to defraud the IRS in November 2022 and is awaiting sentencing.
Investigators later discovered that while the Jaafars reported the winnings on their tax returns, they also claimed equivalent phony gambling losses as an offset.
This case is, at its core, an elaborate tax fraud,” said Acting United States Attorney Joshua Levy in statement. “Over the course of a decade, this father-and-son team defrauded the [lottery commission] and the IRS to pocket millions of hard-earned taxpayers’ dollars.
“These defendants worked together to recruit a wide network of co-conspirators and spread their lottery scam across Massachusetts, avoiding detection by repeatedly lying to government officials,” he added.
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Last Comment ( 1 )
I think the lottery has to be U.S. citizens only and you have to show proof of citizenship at every lottery terminal.