(Trends Wide) — A Massachusetts father and son were sentenced in federal court Monday for a scheme in which they both illegally claimed more than $20 million in lottery winnings and lied on their tax returns to avoid more than $6 million in federal taxes, prosecutors said.
Ali Jaafar, 63, was sentenced to five years in prison, while his 29-year-old son, Yousef Jaafar, was sentenced to 50 months in prison, the US Attorney’s Office for the District of Massachusetts said in a statement Monday. . They were also ordered to pay more than $6 million in restitution and forfeit their proceeds from the scam.
In December, the two were convicted of one count of conspiracy to defraud the IRS, one count of conspiracy to commit money laundering and one count of filing a false tax return.
“This case is, in essence, an elaborate tax fraud. Over the course of a decade, this father-and-son team defrauded the Massachusetts State Lottery Commission and the IRS to pocket millions of hard-earned taxpayer dollars,” Acting United States Attorney Joshua S. Levy said in the notice. “These defendants worked together to recruit a wide network of accomplices and spread their lottery scam in Massachusetts while avoiding detection by repeatedly lying to government officials.”
A screen displays Mega Million lottery ticket betting cards at the Ted’s State Line Mobile station on January 5, 2023, in Methuen, Massachusetts. (Credit: Charles Krupa/AP)
Valerie S. Carter, an attorney for Ali and Yousef Jaafar, told Trends Wide in an email Tuesday that “the Jaafars’ intent is to appeal to the Court of Appeals for the First Circuit.”
Mohamed Jaafar, another of Ali Jaafar’s sons who was also involved in the plot, pleaded guilty last year to conspiracy to defraud the IRS and will be sentenced in July. Trends Wide has reached out to his attorney for comment.
The men represented three of the top four individual lottery ticket changers in the state in 2019, according to the US Attorney’s Office.
“This case is one example of the extensive efforts the Lottery will take to partner with law enforcement to help prevent illegal activity. This decision is the culmination of years of hard work to maintain the integrity of the Lottery,” said Deborah B. Goldberg, State Treasurer and General Receiver and Lottery Commission Chair.
This is how the fraud scheme worked
“From at least 2011 to at least June 2020, the defendants conspired with others known and unknown to the grand jury to launder the proceeds of the Massachusetts state lottery proceeds of others,” an indictment by the three reads.
The men were buying winning lottery tickets from people across the state who wanted to sell their ticket for a cash discount instead of claiming their prize, the US Attorney’s Office said in its statement.
That meant the real winners avoided identification by the state lottery commission, which is required to “withhold outstanding taxes, back taxes and child support payments” before paying out the prize, according to the statement.
After purchasing the winners’ discount tickets, with the help of convenience store owners who would “facilitate the transactions,” the defendants would claim the prize money from the commission as their own, the statement added.
The Massachusetts State Lottery Commission will revoke the lottery agent licenses of dozens of lottery retailers involved in fraud, the US Attorney’s Office said.
Prosecutors say the Jaafars illegally cashed more than 14,000 lottery tickets totaling more than $20 million in the “elaborate ‘ten percent’ scheme.”
Prosecutors say the defendants further benefited by “reporting winnings on their income tax returns and claiming equivalent false gambling losses as compensation, thereby avoiding federal income taxes and receiving fraudulent tax refunds.”
“Instead of using business savvy and savvy to create a legitimate multi-generational family business, the Jaafars ran a complex tax and lottery scam for a decade, creating a vast network of accomplices to further their illegal activities,” Joleen Simpson , special agent in charge of IRS Criminal Investigations in Boston, in the statement.
— Trends Wide’s Michelle Watson contributed to this report.
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(Trends Wide) — A Massachusetts father and son were sentenced in federal court Monday for a scheme in which they both illegally claimed more than $20 million in lottery winnings and lied on their tax returns to avoid more than $6 million in federal taxes, prosecutors said.
Ali Jaafar, 63, was sentenced to five years in prison, while his 29-year-old son, Yousef Jaafar, was sentenced to 50 months in prison, the US Attorney’s Office for the District of Massachusetts said in a statement Monday. . They were also ordered to pay more than $6 million in restitution and forfeit their proceeds from the scam.
In December, the two were convicted of one count of conspiracy to defraud the IRS, one count of conspiracy to commit money laundering and one count of filing a false tax return.
“This case is, in essence, an elaborate tax fraud. Over the course of a decade, this father-and-son team defrauded the Massachusetts State Lottery Commission and the IRS to pocket millions of hard-earned taxpayer dollars,” Acting United States Attorney Joshua S. Levy said in the notice. “These defendants worked together to recruit a wide network of accomplices and spread their lottery scam in Massachusetts while avoiding detection by repeatedly lying to government officials.”
A screen displays Mega Million lottery ticket betting cards at the Ted’s State Line Mobile station on January 5, 2023, in Methuen, Massachusetts. (Credit: Charles Krupa/AP)
Valerie S. Carter, an attorney for Ali and Yousef Jaafar, told Trends Wide in an email Tuesday that “the Jaafars’ intent is to appeal to the Court of Appeals for the First Circuit.”
Mohamed Jaafar, another of Ali Jaafar’s sons who was also involved in the plot, pleaded guilty last year to conspiracy to defraud the IRS and will be sentenced in July. Trends Wide has reached out to his attorney for comment.
The men represented three of the top four individual lottery ticket changers in the state in 2019, according to the US Attorney’s Office.
“This case is one example of the extensive efforts the Lottery will take to partner with law enforcement to help prevent illegal activity. This decision is the culmination of years of hard work to maintain the integrity of the Lottery,” said Deborah B. Goldberg, State Treasurer and General Receiver and Lottery Commission Chair.
This is how the fraud scheme worked
“From at least 2011 to at least June 2020, the defendants conspired with others known and unknown to the grand jury to launder the proceeds of the Massachusetts state lottery proceeds of others,” an indictment by the three reads.
The men were buying winning lottery tickets from people across the state who wanted to sell their ticket for a cash discount instead of claiming their prize, the US Attorney’s Office said in its statement.
That meant the real winners avoided identification by the state lottery commission, which is required to “withhold outstanding taxes, back taxes and child support payments” before paying out the prize, according to the statement.
After purchasing the winners’ discount tickets, with the help of convenience store owners who would “facilitate the transactions,” the defendants would claim the prize money from the commission as their own, the statement added.
The Massachusetts State Lottery Commission will revoke the lottery agent licenses of dozens of lottery retailers involved in fraud, the US Attorney’s Office said.
Prosecutors say the Jaafars illegally cashed more than 14,000 lottery tickets totaling more than $20 million in the “elaborate ‘ten percent’ scheme.”
Prosecutors say the defendants further benefited by “reporting winnings on their income tax returns and claiming equivalent false gambling losses as compensation, thereby avoiding federal income taxes and receiving fraudulent tax refunds.”
“Instead of using business savvy and savvy to create a legitimate multi-generational family business, the Jaafars ran a complex tax and lottery scam for a decade, creating a vast network of accomplices to further their illegal activities,” Joleen Simpson , special agent in charge of IRS Criminal Investigations in Boston, in the statement.
— Trends Wide’s Michelle Watson contributed to this report.
