Father and Sons Are Charged in $21 Million Lottery Fraud

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Ali Jaafar and his sons Mohamed and Yousef cashed successful much than 13,000 Massachusetts lottery tickets, prosecutors said, allowing the existent winners to perchance debar paying taxes oregon kid support.

Customers buying lottery tickets successful  Methuen, Mass. Three men look   fraud, wealth  laundering and taxation  evasion charges for their roles successful  what the authorities accidental    was a ticket-cashing scheme.
Credit...CJ Gunther/EPA, via Shutterstock

Neil Vigdor

Aug. 23, 2021, 6:34 p.m. ET

No statistical exemplary could explicate it, and erstwhile a Massachusetts antheral and his 2 sons cashed successful much than 13,000 winning lottery tickets worthy astir $21 cardinal implicit 8 years, national prosecutors and lottery officials said it was thing but luck.

“A statistician volition accidental that there’s immoderate astronomical odd,” Michael R. Sweeney, the enforcement manager of the Massachusetts State Lottery, said successful an interview. “But the world is, it’s zero.”

In a 19-page indictment that was unsealed connected Monday successful U.S. District Court successful Massachusetts, Ali Jaafar and his sons Mohamed Jaafar and Yousef Jaafar were collectively charged with much than a twelve counts of fraud, wealth laundering and taxation evasion for taking portion successful what the authorities accidental was a ticket-cashing scheme. A immense bulk of the tickets were the scratch-off benignant that are typically sold astatine convenience stores, prosecutors said.

From 2011 to 2019, according to the indictment, the Jaafars claimed the prizes connected behalf of the existent winners, who perchance avoided having their winnings garnished for unpaid taxes oregon kid support, a request for immoderate prize implicit $600 successful Massachusetts.

The Jaafars past falsely reported six- and seven-figure gambling losses connected their taxation returns, allowing them to drastically trim the taxes they paid connected the winnings, prosecutors said.

The household had antecedently raised the suspicions of lottery officials successful Massachusetts, wherever prosecutors said that Ali Jaafar, 63, of Watertown, Mass., was the “top idiosyncratic lottery summons casher” successful 2019. Mohamed Jaafar, 31, of Watertown and Waltham, Mass., ranked 3rd that year, and Yousef Jaafar, 28, of Watertown was fourth.

The Massachusetts State Lottery Commission temporarily suspended the 3 men from cashing lottery tickets, a determination that the Jaafars unsuccessfully challenged successful Superior Court successful Boston successful 2019.

“I deliberation it truly speaks to a level of hubris,” Mr. Sweeney said of their ineligible challenge. “This is not the effect of idiosyncratic who’s fortunate oregon idiosyncratic who is, quote-unquote, playing a lot.”

Ali Jaafar and Mohamed Jaafar pleaded not blameworthy connected Monday afternoon, appearing by videoconference successful national tribunal successful Boston. They had some been arrested earlier connected Monday and were aboriginal released connected their ain recognizance. Their lawyers did not instantly respond to requests for comment.

It was not instantly wide whether Yousef Jaafar was successful custody. His lawyer besides did not respond to a petition for comment.

The lawyer who represented the Jaafars successful their erstwhile civilian enactment against the lottery committee declined to remark connected Monday.

A spokeswoman for the U.S. District Court successful Massachusetts did not instantly remark further connected the case.

In Massachusetts, earlier idiosyncratic tin currency successful a winning summons that exceeds $600 successful value, lottery officials volition cheque to spot if that idiosyncratic owes immoderate unpaid authorities and national taxes oregon kid support.

To debar having their prize wealth garnished, lottery officials said, radical volition sometimes merchantability their winning tickets to idiosyncratic other to currency successful with the lottery commission. The idiosyncratic cashing successful the summons volition support 10 percent oregon 20 percent of the winnings successful a strategy known arsenic 10 percenting.

“They’re trying to bushed the system,” Mr. Sweeney said.

In the indictment, national prosecutors said that Ali Jaafar had paid little than $24,500 successful national taxes connected $15 cardinal successful lottery winnings, and that helium had received $886,261 successful taxation refunds for bogus gambling losses from 2011 to 2019.

Prosecutors said that Mohamed Jaafar had paid little than $21,700 successful national taxes connected $3.3 cardinal successful lottery winnings, and that helium had received $106,032 successful taxation refunds for phony gambling losses from 2012 to 2019.

Yousef Jaafar paid little than $10,700 connected $2.4 cardinal successful lottery winnings and received $185,951 successful taxation refunds for fictitious gambling losses from 2013 to 2019, according to the indictment.

They were charged with 1 number each of conspiracy to defraud the United States, and wealth laundering conspiracy. Ali Jaafar and Mohamed Jaafar were each charged with 5 counts of filing mendacious taxation returns, portion Yousef Jaafar was charged with 3 counts of filing mendacious taxation returns.

Under state lottery rules successful Massachusetts, a idiosyncratic who claims 20 oregon much prizes of astatine slightest $1,000 successful 1 twelvemonth is taxable to a reappraisal by the manager of the lottery. If the lottery manager determines that it was statistically “improbable” for the idiosyncratic to person won truthful galore times, officials said, the idiosyncratic tin person a 90-day suspension from claiming prizes that transcend $600. A 2nd usurpation tin effect successful a 180-day suspension, and a 3rd usurpation tin effect successful a one-year ban.

Mr. Sweeney said that the lottery committee had taken administrative enactment against the Jaafars and had referred the substance to instrumentality enforcement. He said that different akin transgression cases involving lottery fraud were continuing.

“It’s harmless to assume,” helium said, “there are much shoes to drop.”

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