Father and son from Watertown sentenced in $20 million lottery ticket cashing scheme

Crime

Greater than 40 Massachusetts lottery agent licenses can be revoked or suspended on account of this almost decade-long scheme.

A father and son from Watertown have been sentenced to jail on Monday for planning and executing an elaborate decade-long lottery fraud scheme, wherein they claimed greater than 14,000 profitable lottery tickets, laundered greater than $20 million in proceeds, and lied on their tax returns, prosecutors mentioned.

Ali Jaafar, 63, and Yousef Jaafar, 29, are dealing with 5 years and simply over 4 years, respectively, along with forfeiting the income from their rip-off and paying restitution of greater than $6 million, a launch from performing U.S. Lawyer Joshua S. Levy’s workplace famous.

The “10-percenting” scheme, which concerned dozens of comfort shops throughout Massachusetts over a nine-year interval, resulted in additional than $6 million in federal tax loss and has led the State Lottery Fee to revoke or droop the licenses of greater than 40 of its brokers, prosecutors mentioned.

In December, a federal jury convicted the daddy and son of conspiracy to defraud the Inner Income Service, conspiracy to commit cash laundering, and every of them of submitting a false tax return.

Mohamed Jaafar, one other of Ali Jaafar’s sons, was additionally concerned within the scheme and pleaded responsible to conspiracy to defraud the IRS on Nov. 4. He’s anticipated to be sentenced on July 25, prosecutors mentioned.

Between 2011 and 2020, the Jaafars bought profitable lottery tickets at a reduction from folks throughout the state who wished to keep away from identification by the lottery fee, which withholds taxes and little one help funds from payouts, in line with prosecutors.

They used comfort shops as go-betweens and lied to the fee, whereas claiming the total prize winnings as their very own.

The Jaafars reported the winnings on their tax returns, however claimed equal faux playing losses as an offset to keep away from federal revenue taxes, prosecutors defined.

In 2019 alone, Ali Jaafar cashed extra lottery tickets than anybody in Massachusetts and never far behind, his sons, Mohamed and Yousef cashed the third and fourth most, respectively, prosecutors mentioned.

“This case is, at its core, an elaborate tax fraud,” Levy mentioned in an announcement. “Over the course of a decade, this father-and-son crew defrauded the Massachusetts State Lottery Fee and the IRS to pocket hundreds of thousands of hard-earned taxpayers’ {dollars}. These defendants labored collectively to recruit a large community of co-conspirators and unfold their lottery rip-off throughout Massachusetts, avoiding detection by repeatedly mendacity to authorities officers.”

Greater than $1.2 million of the greater than $6 million in federal tax losses went on to the Jaafars within the type of fraudulent tax refunds, prosecutors mentioned.

“This case ought to function a warning to those that assume they will cheat the system for their very own monetary acquire: you’ll be recognized, prosecuted and held accountable,” the performing U.S. legal professional added.