A Massachusetts father and his two sons used a covert network of convenience stores and tax-shy 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 the Boston Globe’s reporting on the saga Tuesday.He started 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 $367,000 total payout, and in 2013 – the same year he roped his sons Yousef and Mohamed into the plot – he nabbed 867 tickets worth almost $1.3 million, the outlet noted.The trio cashed in using a form of money laundering known as “10 percenting,” in which real lottery winners enlist middle men in order to avoid coughing up hefty taxes on their winnings.Instead of claiming the lucky ticket themselves, the winners have middlemen like the Jaafars to claim the prize in exchange for a 10 to 25 percent cut of the earnings.The real winner is subsequently able to reap the cash benefits of their win without the tax bill, and the ten percenter typically avoids taxes by claiming gambling losses on their own filings, the outlet said.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 sons were the most prolific 10 percentents in Massachusetts.Ali Jaafar confessed to the illicit scheme at their trial last year, and said that their network of convenience store allies would call them in if they had a winning ticket of over $600, the outlet reported.Most of the time, Ali or one of his sons showed up and purchased the ticket for slightly less than the full prize, and never even learned the real winner’s name, the outlet reported.The convenience store operators got their own kickback – typically between $50 and $100 – and the Jaafars marched to the lottery office to claim the jackpot.Ali then claimed bogus gambling losses on his tax returns, which allowed him to avoid paying taxes despite lottery earnings of around $10 million, according to the Boston Globe.By 2019, however, the jig was up: Michael R. Sweeney, the Massachusetts State Lottery Commission’s executive director, caught wind of the Jaafars as “high frequency winners,” and initiated an investigation that suspended the trio in May of that year.With the Lottery Commission’s new director of compliance and security on their heels, the Jaafars tried to cover their tracks by enlisting friends to cash the tickets in at the lottery office in their place.By that point, though, the IRS was also starting to sniff them out: Undercover IRS agent sold winning tickets to a convenience store clerk in Somerville, only for those tickets to end up in the hands of Yousef Jaafar’s stand-ins, Ahmed Shikhalard and Nicholas Frankel, the Globe reported.In the summer of 2020, both Yousef and Mohamed – the latter of whom previously showed 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 conspiracy charge and was subsequently sentenced to six months behind bars, $964,000 in restitution, and two-year ban on lottery activities, the Boston Globe reported.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 US District Attorney’s Office in Massachusetts.Ali was sentenced to five years in prison, and Yousef with 50 months, the DA said.“Instead of using business savvy 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 coconspirators to further their illegal activities,” said Joleen Simpson, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston.“Tax violations have been erroneously referred to as victimless crimes, but it’s the honest law-abiding citizen who is harmed when someone tries 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 over 40 lottery agents, the DA confirmed.At his sentencing in July, Mohamed Jaafar tearfully regretted the “very gross and disturbing” crime he, his father, and his brother committed.Although the judge handed down a heavier sentence than his lawyer requested, Mohamed told the judge that he felt relief 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.”
25 Ekim 2023 - 16:40
How a Massachusetts family scammed the lottery out of $20 million
Ali Jaafar, 63, of Watertown, started the elaborate scheme around 2011.
25 Ekim 2023 - 16:40