A CRACKDOWN in lottery law has been launched after a major $1.8million scam was exposed, resulting in a father and son hit with a federal prison sentence.
Ali Jaafar, 63, and his son Yousef Jaafar, 29, were sentenced to five and four years respectively for their roles in a massive “ten-percenting” scheme that involved several convenience stores in Massachusetts.
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“Ten-percenting” refers to a lottery scheme in which winning lottery tickets are illegally resold at a discount price.
This allows winners to avoid reporting the money on their tax returns.
The Jaafars, along with another son, Mohamed Jaafar, were accused in 2021 of scamming the Massachusetts lottery by working with legitimate winners to buy the winnings at 10 to 20 percent of their actual value and filing false tax returns, reported CBS Boston at the time.
Between 2011 and 2019, the Jaafars were able to cash more than 14,000 lottery tickets as part of the plot, claiming over $20.9million that was not reported on their tax returns.
This resulted in about $6million in federal tax losses, according to the U.S. Attorney’s Office in Massachusetts.
Along with their sentences, the Jaafars are also being ordered to pay back the $6million in restitution as well as forfeit the profits made from the scheme.
Mohamed Jaafar was sentenced to six months in prison and two years of supervised release, reported Mass Live.
He is ordered to pay $964,569 in restitution.
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The Jaafars received more than $1.8million in tax refunds and claimed gambling losses.
Yousef Jaafar claimed more than 500 prizes in 2018, including one for $100,000, according to court documents seen by Mass Live.
A state policy designed to crack down on those who rack up huge lottery prizes frequently was put into effect in 2017, allowing lottery officials to investigate, and possibly penalize, anyone who wins 20 or more lottery prizes at $1,000 or more within a calendar year.
If lottery officials determine that the person’s winnings are “factually or statistically improbable,” the policy allows the lottery to freeze the player’s payouts for months.
“Implementing this policy is a major step forward in addressing potential issues of money laundering and other illegal activities and the potential avoidance of outstanding child support liabilities, and taxes and fees owed to the Commonwealth,” said then-Massachusetts Executive Director Michael Sweeney.
Sweeney added that the policy “remains a top compliance issue for me.”
Several convenience stores were also implicated as being part of the Jaafars’ plot.
The state’s Attorney’s Office said the Jaafar trio recruited and paid dozens of convenience stores to work as “go-betweens” and conduct the discount ticket purchases.
“There is a phenomenon in state lotteries where certain individuals defy all laws of probability and statistics” with the rare of their success, said Gregory Sullivan, research director at the Pioneer Institute and the state’s former inspector general from 2002 to 2012.
Sullivan, who has researched vulnerabilities in the lottery in the past said that people who frequently cash in lottery tickets aren’t winners but are usually collecting wins on behalf of others to evade taxes.
“This is a well-known problem, you know, not just in Massachusetts,” he told WBUR. “But it is a well-known problem in Massachusetts, and it has been for some time.”
https://www.the-sun.com/news/8749688/lotto-crackdown-massachusetts-ali-yousef-jaafar/