A Massachusetts father and his two children used an undercover network of convenience stores and evasive scratch-off winners to defraud the lottery of more than $20 million, officials said.
Ali Jaafar, 63, of Watertown, had tried to pass off his winning streak as luck, but the lottery commission launched an investigation into the “factually or statistically improbable” results, according to Tuesday’s Boston Globe report on the saga.
He began the elaborate scheme around 2011, when he claimed 136 lottery tickets worth $217,000, according to the newspaper.
The following year, he claimed 214 tickets for a total payment of $367,000, and in 2013, the same year he involved his sons Yousef and Mohamed in the plot, he secured 867 tickets worth almost $1.3 million, he said. the middle.
The trio cashed in using a form of money laundering known as “10 percent,” in which real lottery winners recruit middlemen to avoid paying heavy taxes on their winnings.
Instead of claiming the lucky ticket themselves, winners have middlemen like the Jaafars claim the prize in exchange for a 10 to 25 percent cut of the winnings.
The true winner can then reap the cash benefits of their victory without the tax bill, and ten percent typically avoid taxes by claiming gambling losses on their own returns, the outlet said.
Ali Jaafar now faces five years behind bars. Massachusetts Lottery
Within a decade, authorities told the Globe, Ali Jaafar – a Lebanese immigrant who started a prepaid phone card business in the 1990s and had easy access to convenience stores and their owners – and his children made up 10 percent most prolific cent in Massachusetts.
Ali Jaafar confessed to the illicit scheme at his trial last year and said his network of convenience store allies would call them if they had a winning ticket worth more than $600, the outlet reported.
Most of the time, Ali or one of his children would show up and buy the ticket for a little less than the full prize, and they didn’t even know the winner’s real name, the outlet reported.
The convenience store operators received their own bribe (usually between $50 and $100) and the Jaafars headed to the lottery office to claim the jackpot.
Yousef Jaafar, 29, was sentenced to about four years in prison. Massachusetts Lottery
Ali then claimed false gambling losses on his tax returns, allowing him to avoid paying taxes despite winning around $10 million in the lottery, according to the Boston Globe.
In 2019, however, the situation ended: Michael R. Sweeney, executive director of the Massachusetts State Lottery Commission, learned that the Jaafars were “high-frequency winners” and launched an investigation that suspended the trio in May. of that year.
With the Lottery Commission’s new compliance and security director hot on their heels, the Jaafars tried to cover their tracks by recruiting friends to collect tickets at their local lottery office.
By this time, however, the IRS was starting to catch on to them, too: An undercover IRS agent sold the winning tickets to a convenience store clerk in Somerville, only for those tickets to end up in the hands of Yousef Jaafar’s surrogates, Ahmed Shikhalard and Nicholas Frankel, the Globe reported.
After the Jaafars were labeled “high-frequency winners,” the Massachusetts State Lottery Commission launched an investigation that suspended the trio in May 2019. Shutterstock
In the summer of 2020, both Yousef and Mohamed – the latter of whom had previously shown promise as an intern for then-Senator John Kerry – were turned away at the lottery office.
Three years later, in November 2023, Mohamed, 33, pleaded guilty to a single count of conspiracy and was subsequently sentenced to six months behind bars, $964,000 in restitution and a two-year ban on lottery activities, he reported. the Boston Globe.
Ali and Yousef, 29, went to trial in December and were both found guilty of one count of conspiracy to defraud the IRS, one count of conspiracy to commit money laundering and one count each of filing a false tax return, according to the United States. Massachusetts District Attorney’s Office.
Ali was sentenced to five years in prison and Yousef to 50 months, the district attorney said.
“Instead of using their business knowledge and skill to build a legitimate multi-generational family business, the Jaafars carried out a complex, decade-long tax and lottery scam, building a vast network of accomplices to further their illegal activities,” Joleen said. Simpson, Specialist Agent in Charge of Criminal Investigations for the Internal Revenue Service in Boston.
“Tax violations have been wrongly called victimless crimes, but it is the honest, law-abiding citizen who is harmed when someone attempts to manipulate our nation’s tax system.”
As a result of the scheme, the Massachusetts State Lottery Commission is now in the process of revoking or suspending the licenses of more than 40 lottery agents, the district attorney confirmed.
At his sentencing in July, Mohamed Jaafar tearfully lamented the “very serious and disturbing” crime he, his father and brother committed.
Although the judge handed down a harsher sentence than his lawyer requested, Mohamed told him he was relieved now that the ordeal was over.
“It feels like a dark cloud has floated away,” he said.
“And I can finally see a clear path.”
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Source: vtt.edu.vn