Father and son sentenced for a decade of $20 million lottery fraud
A Massachusetts father and son have both been sent to prison for running an elaborate lottery fraud scheme designed to enrich themselves and help winners avoid paying taxes on their windfall
BOSTON– A Massachusetts father and son have both been sent to prison for running an elaborate lottery fraud scheme designed to enrich themselves and help winners avoid paying taxes on their windfall, prosecutors have said.
Ali Jaafar, 63, and Yousef Jaafar, 29, both of Watertown, cashed in 14,000 winning lottery tickets over a period of about 10 years, laundered more than $20 million in proceeds, then lied about their tax returns to fool the IRS. about $6 million, the U.S. Attorney’s Office in Boston said Monday.
The Jaafars bought discounted winning lottery tickets from people who wanted to avoid identification by the state lottery commission, which withholds taxes and overdue alimony payments from the payments.
After buying the tickets, using the stores selling them as middlemen, the Jaafars demanded the full amount of the prize. Although they reported the winnings on their tax returns, they also claimed equivalent false gambling losses as compensation to avoid federal income tax, prosecutors said.
Ali Jaafar was sentenced to five years in prison. Yousef Jaafar was sentenced to more than four years. They 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 IRS, conspiracy to launder money and filing a false tax return.
Mohamed Jaafar, another of Ali Jaafar’s sons, pleaded guilty to his role in the scheme in November and is awaiting sentencing.
The defendants paid the owners of dozens of stores that sell lottery tickets to facilitate transactions, and the national lottery commission is in the process of revoking or suspending the licenses of more than 40 lottery agents, authorities said.