Father and son sentenced for $20M lottery fraud.
Massachusetts Father and Son Duo Sentenced for $20 Million Lottery Fraud Scheme
It’s a conspiracy that sounds like it’s straight out of a movie. A father and son duo from Massachusetts have been sentenced in federal court for fraudulently claiming more than $20 million in lottery prizes and falsifying their tax returns to avoid paying over $6 million in federal taxes.
The U.S. Attorney’s Office for the District of Massachusetts announced that 29-year-old Yousef Jaafar received a 50-month prison sentence, while his father Ali Jaafar, 63, received a five-year jail term. They were also ordered to forfeit their ill-gotten gains and pay restitution exceeding $6 million.
The two were found guilty of one count of conspiracy to launder money, one count of conspiracy to deceive the Internal Revenue Service (IRS), and one count each of filing a false tax return in December.
“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 taxpayers’ dollars,” said acting U.S. Attorney Joshua S. Levy. “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.”
The Jaafars collaborated with individuals known to the grand jury and those who were unknown to them from at least 2011 until at least June 2020. Their scheme involved purchasing winning lottery tickets from residents of the state who preferred to sell their ticket for a cash discount, rather than keeping their winnings. The state lottery commission, which is obligated to “withhold outstanding taxes, back taxes and child support payments” before distributing the reward, would have been able to identify the true winners as a result.
The defendants would claim the prize money to the commission as their own after purchasing the cheaper tickets from the winners, with the assistance of gas station owners who would “facilitate the transactions,” the announcement continued.
In a “elaborate ‘ten-percenting’ scheme,” according to the prosecution, the Jaafars illegally redeemed over 14,000 lottery tickets worth more than $20 million. Further profits were made by the defendants “reporting the winnings on their income tax returns and claiming equivalent fake gambling losses as an offset, thereby avoiding federal income taxes and receiving fraudulent tax refunds.”
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