23 May 2023 , 18:52
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A father and son have been sent to prison for their multimillion-dollar scheme in which they cashed winning lottery tickets on behalf of ticket holders to avoid taxes.
Ali Jaafar, 63, and Yousef Jaafar, 29, cashed a staggering 14,000 winning lottery tickets in just 10 years in Massachusetts, US.
The Watertown residents' scheme saw them launder over $20 million in proceeds, and they then lied on their tax returns to cheat the IRS out of about $6 million, according to the US attorney's office in Boston.
The father and son scheme involved the pair buying winning tickets from people who did not want to be identified by the state lottery commission.
The commission withholds taxes and outstanding child support payments from pay outs.
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Ali Jaafar, 63, was sentenced to five years in prison. (Massachusetts Lottery)After purchasing the tickets, using the stores that sold them as go-betweens, the Jaafar's claimed the full prize amount.
Although they reported the winnings on their tax returns, they also claimed equivalent fake gambling losses as an offset to avoid federal income taxes, prosecutors said.
The scheme is also known as 'ten percenting' as those who buy them keep a portion of the winnings.
Yousef Jaafar, 29, was also found guilty in the scheme (Massachusetts Lottery)Ali Jaafar was sentenced to five years in prison while Yousef Jaafar received a sentence of more than four years.
The pair were also ordered to pay $6 million in restitution and forfeit the profits from their scheme.
They were convicted in December of conspiracy to defraud the Internal Revenue Service (IRS), conspiracy to commit money laundering, and filing a false tax return, according to ABC News.
Mohamed Jaafar, another of Ali Jaafar’s sons, pleaded guilty to his role in the scheme in November and awaits sentencing.
The duo paid the owners of dozens of stores that sell lottery tickets to facilitate the transactions, and the state lottery commission is in the process of revoking or suspending the licenses of more than 40 lottery agents, authorities said.
"By defrauding the Massachusetts Lottery and the Internal Revenue Service, the Jaafars cheated the system and took millions of hard-earned taxpayers' dollars," said United States Attorney Rachael S. Rollins in December.
"This guilty verdict shows that elaborate money laundering schemes and tax frauds will be rooted out and prosecuted."
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