OAN’s Geraldyn Berry
5:37 PM – Wednesday, May 23, 2023
In a conspiracy that saw a father and son duo fraudulently claim more than $20 million in lottery prizes and falsify their tax returns to avoid paying more than $6 million in federal taxes, authorities have announced that the pair from Massachusetts have been sentenced in federal court on Monday.
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According to a news release by the U.S. Attorney’s Office for the District of Massachusetts, 29-year-old Yousef Jaafar received a 50-month prison sentence, while his father Ali Jaafar, 63, received a five-year jail term. They were also ordered to forfeit their ill-gotten gains and pay restitution exceeding $6 million.
The two were found guilty of one count of conspiracy to launder money, one count of conspiracy to deceive the Internal Revenue Service (IRS), and one count each of filing a false tax return in December.
The case “at its core, [was] an elaborate tax fraud., according to acting U.S. Attorney Joshua S. Levy.
“Over the course of a decade, this father-and-son team defrauded the Massachusetts State Lottery Commission and the IRS to pocket millions of hard-earned taxpayers’ dollars,” Levy said. “These defendants worked together to recruit a wide network of co-conspirators and spread their lottery scam across Massachusetts, avoiding detection by repeatedly lying to government officials.”
In addition, another one of Ali Jaafar’s sons, Mohamed Jaafar, pled guilty to conspiracy in cheating the IRS last year in participation of the scheme. He will be sentenced in July.
According to the indictment, the defendants collaborated with individuals known to the grand jury and those who were unknown to them from at least 2011 until at least June 2020.
The U.S. Attorney’s Office stated in its press release that the men’s scheme involved purchasing winning lottery tickets from residents of the state who preferred to sell their ticket for a cash discount, rather than keeping their winnings.
The state lottery commission, which is obligated to “withhold outstanding taxes, back taxes and child support payments” before distributing the reward, would have been able to identify the true winners as a result.
The defendants would claim the prize money to the commission as their own after purchasing the cheaper tickets from the winners, with the assistance of gas station owners who would “facilitate the transactions,” the announcement continued.
According to the US Attorney’s Office, the Massachusetts State Lottery Commission will terminate the lottery agent licenses of dozens of lottery merchants that took part in the scheme.
In a “elaborate ‘ten-percenting’ scheme,” according to the prosecution, the Jaafars illegally redeemed over 14,000 lottery tickets worth more than $20 million.
Further profits were made, according to the prosecution, by the defendants “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.”
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