According to the US Attorney’s Office in Boston, Ali Jaafar (63) and his son Yousef Jaafar (19) from Watertown cashed out more than 14,000 winning tickets in the past decade. The two men, who posed as ” 10percenters” ran an industrial-scale ticket-cashing scam.
According to the same prosecutors, while the Jaafars benefited themselves, they also helped the lottery winners avoid paying taxes on the windfalls. The Jaafars achieved the second by hiding critical information on the tax returns and thus cheated the Internal Revenue Service of approximately 6 million.
Massachusetts Gamblers Will Sell You Winning Lottery Tickets
The two started the scheme by buying winning lottery tickets from gamblers all over the state at a discount in 2011. while establishing ties with different convenience store owners with the aim of simplifying transactions.
Massachusetts is one of the states that deducts child support and federal taxes from lottery winners’ winnings if they exceed a certain threshold. The threshold for the Bay State is $600.
It is for this reason that some lottery winners sell their tickets to unlicensed businesses who cash them out at a standard 10 percent discount. This was also the case in the “10 percent” scheme run by Jafaar’s family.
Ali Jafaar, who was convicted in December last year, has been sent to a federal jail where he’ll spend five years . His son was also sentenced to around 4 years of prison. US district judge Nathaniel M. Gorton ruled the two must pay six million dollars in restitution, and forfeit profits from their business.
MLC to Revoke Over 40 Vendor Licenses
The Massachusetts Lottery Commission, which regulates the lottery, is now threatening to suspend or revoke the licenses of more than forty lotto vendors, who received commissions for referring winners to them.
The Jafaars used convenience stores to purchase over 14,000 winning lottery tickets. They claimed the full amount of the prize, reported the winnings in their tax returns and claimed gambling losses which were proved to be fake.
According to the same prosecutor, the gambling losses were offset by the two in order to avoid paying federal income tax. Not only the Jafaars have committed lottery fraud to pocket millions. Eddie Tipton manipulated lottery draws in at least five US States using a computer program, earning millions for himself and his accomplices.
Tipton was sentenced to 25 years of imprisonment in 2017 . He will be released from the Clarinda Prison in July 2022 after serving 5 years.
A UK resident Edward Putman ran a sophisticated lottery scam that dates back to 2009.. This helped him to forge a winning ticket in order to win a multimillion-dollar prize.
Another Jaafar family member involved in the scheme
The Jafaars first came to the attention of authorities in 2019, when the Massachusetts Lottery Commission noticed Ali Jaafar as the main individual lottery ticket casher for the year.
Yousef Jaafar and Mohammed Jaafar were listed as the third and fourth. Mohamed Jaafar made the decision to plead guilty to a conspiracy of fraud against the Internal Revenue Service in November 20, 2022. He is waiting for his sentencing.
Acting United States attorney Joshua Levy released a statement about this case and called it “an intricate tax fraud”. Levy said that the defendants worked together to create a large network of conspirators, and expand the scheme across the entire state.