This case is an interesting one. A father (Ali Jaafar) and his sons (Yousef Jaafar & Mohamed Jaafar) are accused of buying lottery winnings at a discount to make money but not properly reporting the income to the IRS. This scheme allowed for the real winner to stay anonymous so they could avoid things like child support.
One son, Mohamed Jaafar, pled guilty and is scheduled to be sentenced later in 2023.
The men represented three of the top four individual lottery ticket cashers in the state in 2019, according to the US Attorney’s Office.
…
The men would buy winning lottery tickets from people across the state who wanted to sell their ticket for a cash discount instead of claiming their prize, the US Attorney’s Office said in its news release.
That meant the real winners avoided identification by the state’s lottery commission, which is required to “withhold outstanding taxes, back taxes and child support payments” before paying the prize, the release said.
After buying the discounted tickets from the winners, with the help of convenience store owners that would “facilitate the transactions,” the defendants would claim the prize money to the commission as their own, the release added.
Dozens of lottery retailers that participated in the scheme will have their lottery agent licenses revoked by the Massachusetts State Lottery Commission, the US Attorney’s Office said.
Prosecutors say the Jaafars unlawfully cashed over 14,000 lottery tickets totaling more than $20 million in the “elaborate ‘ten-percenting’ scheme.”
Prosecutors say the defendants further profited by “reporting the winnings on their income tax returns and claiming equivalent fake gambling losses as an offset, thereby avoiding federal income taxes and receiving fraudulent tax refunds.”
https://www.cnn.com/2023/05/23/us/massachusetts-father-son-lottery-sentencing/index.html
Sources:
- https://www.courtlistener.com/docket/60270494/united-states-v-jaafar/
- https://www.courtlistener.com/docket/60270496/united-states-v-jaafar/
- https://www.courtlistener.com/docket/60270495/united-states-v-jaafar/
- https://www.justice.gov/usao-ma/pr/watertown-family-charged-lottery-scam-and-tax-fraud
- https://www.justice.gov/usao-ma/pr/watertown-father-and-son-found-guilty-lottery-scam-and-tax-fraud
- https://www.justice.gov/usao-ma/pr/watertown-father-and-son-sentenced-prison-decade-long-lottery-and-tax-fraud-scheme
- https://www.cnn.com/2023/05/23/us/massachusetts-father-son-lottery-sentencing/index.html
Transcript:
[00:00:00]
[00:00:08] Keith: Hey, welcome to eCrimeBytes, nibble number 42. This is where a Massachusetts father and his son’s lottery scheme caught up with them. This is a really interesting case. A father, his name is Ali Jaafar, and his sons Yousef Jaafar and Mohamed Jaafar are accused of buying lottery winnings at a discount to make money, but they weren’t properly reporting their winnings, or what they made from it, as income to the irs.
[00:00:42] This scheme allowed for the real winner of the lottery to stay anonymous so that real winner can avoid things like child support. You can see here that this scheme isn’t on the up and up. Important to note is one son, Mohamed Jaafar, pled guilty and is scheduled to be sentenced later in 2023, so at least one person in the family has accepted responsibility for the scheme.
[00:01:10] So what was interesting is this group of men, they represented three of the top four individual lottery ticket cashers in the state in 2019, according to the US Attorney’s office. The men would buy winning lottery tickets from people across the state who wanted to sell their ticket for a cash discount, instead of claiming their prize, the US Attorney’s office said in a news release.
[00:01:34] So you can imagine, let’s say they make a thousand dollars and to get it, they would have to give their information. They would have to possibly give up the fact that they owe child support and things like that.
[00:01:48] And they said, Nope, that’s not for me. I’m gonna take my thousand dollars winning and sell it to these gentlemen for maybe, and I’m just making this number up, $750. Where I wouldn’t get the full thousand dollars, but I could still get a lion share. They would get the thousand dollars ticket, but since they paid me $750, they’re only making $250 on it.
[00:02:12] Okay, so you see how the scheme works? So what this meant was when this scheme was in action, the real winners avoided identification by the State’s Lottery Commission, which is required to do things like withhold taxes, back taxes, child support payments, and so forth before giving them the prize.
[00:02:36] So after buying these discounted tickets, the winners with the help of the convenience store owners, they would facilitate the transactions. The defendants would claim the prize money to the commission as their own, the release said. So what does that mean? That means that the people that sold these lottery tickets were also in on the scheme because they made it look like the purchase was the Jaafars and not the real winners here. So they were in on the scheme and they’re part of this crime too. Dozens of lottery retailers that participated in this scheme will have their lottery agent license revoked by the Massachusetts State Lottery Commission, the US Attorney Office said. That’s probably a good thing.
[00:03:24] Prosecutors also say that the Jaafars unlawfully cashed over 14,000 lottery tickets totaling more than $20 million in the elaborate, and they call it the 10 percenting scheme. And I don’t know if that’s a reference to how much they would make off it, if it was 10% or if 10% meant something else in this case.
[00:03:49] So where the real crime happened and where they got them is they didn’t report these gains, these winnings that they made on their taxes. So when they didn’t report it on the taxes correctly, that’s tax fraud. And tax fraud is criminal and they are prosecuting them for it.
[00:04:07] So if you enjoyed this real quick eCrimeBytes nibble, you’ll probably enjoy our fuller length episodes where we take crimes like this and look a little deeper into them, and we bounce ideas back and forth between myself and my co-host, Seth Eichenholtz. So I hope to see you over there on one of our longer episodes soon.
[00:04:25] Thanks. Bye.
[00:04:27]
#ecrimebytes #electronic #truecrime #podcast #lottery #tax #fraud #humor #funny #comedy
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