USA

Watertown father and son convicted of lottery scam


Crime

The pair claimed other people’s lottery winnings as part of a scheme to avoid paying taxes.

Dina Rudick/Personal Globe/File

A federal jury on Friday found a Watertown father and son guilty for their part in a lottery scam, in which the couple claimed more than $20 million in Massachusetts lottery winnings over nine years on behalf of holders actual winning tickets to avoid paying taxes and to collect tax refunds, prosecutors said.

Ali Jaafar, 63, and Yousef Jaafar, 29, were convicted of one count of conspiracy to defraud the Internal Revenue Service, one count of conspiracy to launder money and one count each of filing a false tax return, according to the Massachusetts US attorney’s office.

Mohamed Jaafar, another son of Ali Jaafar, previously pleaded guilty to conspiracy to evade taxes last month under the same scheme.

“By defrauding the Massachusetts Lottery and the Internal Revenue Service, the Jaafars tricked the system and took millions of hard-earned taxpayer dollars,” U.S. Attorney Rachael S. Rollins said in a statement. “This guilty verdict shows that elaborate money laundering schemes and tax evasion will be rooted out and prosecuted.”

Prosecutors say the Jaafars conspired with others to buy discounted winning lottery tickets from players across the state. Convenience store owners often facilitated transactions.

The system is known as “10%” because ticket buyers typically keep between 10 and 20% of each ticket’s value, officials said.

In practice, the scam allows real players to avoid reporting their winnings on tax returns, while conspirators like the Jaafars present winning tickets to the Massachusetts Lottery Commission as their own and collect the full value, said the prosecutors.

“The defendants also reported the ticket winnings as their own on their tax returns and claimed false gambling losses to offset the claimed winnings, thereby avoiding federal income tax and receiving tax refunds,” prosecutors said.

Between 2011 and 2020, the Jaafars and their co-conspirators cashed in more than 14,000 lottery tickets and claimed more than $20 million in winnings, officials said.

“Based on their submitted lottery claims, in 2019, Ali Jaafar was Massachusetts’ top individual lottery ticket collector,” prosecutors said. “Mohamed Jaafar was the third highest single ticket collector and Yousef Jaafar was the fourth highest single ticket collector. In total, the three family members received over $1,200,000 in tax refunds by claiming the other people’s lottery like theirs, then offsetting those winnings with false gambling losses on their tax returns.

Ali Jaafar and Yousef Jaafar are expected to be sentenced to prison in April.

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