Topics: US News, Money, Parenting, Crime, True crime
A father and son carried out the 'biggest money laundering operation' by unlawfully claiming over 14,000 winning lottery tickets.
Ali and Yousef Jaafar from Watertown, Massachusetts, bought winning lottery scratch card tickets off individuals across the state between 2011 and 2020.
The 63-year-old and 29-year-old cashed the winnings in themselves, taking a 10 percent or so cut - known as a 'Ten-Percenting' scheme - meaning the original ticket winners wouldn't have to claim their prize through the Massachusetts State Lottery Commission.
This subsequently allowed winners to dodge legally required identification and 'any outstanding taxes, back taxes and child support payments before paying out prizes'. Prepare yourself for one hell of a scheme:
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To get their hands on the winning tickets, the Jaafars 'recruited and paid the owners of dozens of convenience stores to facilitate the transactions'.
The United States Attorney's Office for the District of Massachusetts' press release states: "After purchasing tickets from the lottery winners at a discount, using the convenience stores as go-betweens, the defendants lied to the Commission, claiming the full amount of the prize money as their own.
"The defendants then 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."
In total, the Jaafar's unlawfully claimed over 14,000 winning lottery tickets - with Ali the top individual lottery ticket casher for Massachusetts in 2019, Yousef the fourth highest individual ticket casher and another of Ali's sons, Mohamed, the third highest individual ticket casher.
Over nine years, Ali and Yousef laundered 'over $20 million in proceeds' of the lottery money and their dodging of tax returns led to 'more than $6 million in federal tax loss'.
In December 2022, the father and son duo were convicted of one county of conspiracy to defraud the Internal Revenue Service and one count of conspiracy to commit money laundering and each convicted of one count of filing a false tax return.
One of Ali's other sons, Mohamed, pleaded guilty to conspiracy to defraud the Internal Revenue Service.
Ali was sentenced to five years, Yousef to four years and one month in prison and Mohamed six months in prison and two years of supervised release.
Ali and Yousef were also ordered to pay $6,082,578 and give up any profits they made from their laundering operation. Mohamed was ordered to pay $964,569 in restitution.
Acting United States Attorney Joshua S. Levy reflected on the laundering operation as 'an elaborate tax fraud'.
As per the United States Attorney's Office of the District of Massachusetts release, he said: "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.
"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 total, the Jaafars laundered more than $20 million in proceeds, and their scheme resulted in more than $6 million in tax loss. These defendants pocketed $1.2 million from fraudulent taxpayer refunds.
"I commend the Massachusetts State Lottery Commission and the IRS for their exceptional collaboration and partnership. As a direct result of this case, the Commission is in the process of revoking or suspending the licenses of more than 40 of its lottery agents.
"This case should serve as a warning to those who think they can cheat the system for their own financial gain: you will be identified, prosecuted and held accountable."
