Watertown Father & Sons Charged In $21 Million Lottery Scheme

Watertown MA

24 August, 2021

2:02 PM

Description

WATERTOWN, MA — A father and his two sons have been charged with illegally claiming almost $21 million worth of lottery prizes on behalf of others to help them avoid taxes and other garnishments, prosecutors said Monday. Ali Jaafar, 62, Mohamed Jaafar, 31, and Yousef Jaafear, 28, are accused of running a scam known as "ten percenting," where they take a 10% fee in order to claim lottery winnings for people seeking to avoid having their name attached to a big prize, according to a criminal indictment filed by the U.S. District Attorney's Office. Lottery prizes are fully taxable in Massachusetts and winnings can be garnished if child support, back taxes, or other debts are owed. By conducting this scheme, big-ticket holders can avoid reporting the winnings on their tax returns, and only losing about 10-20% of their money, court documents explain. The family had been allegedly running the fraud for almost a decade, filing claims on more than 13,000 tickets all with prizes of more than $600, prosecutors say. The indictment claims that the men worked with convenience store owners and other authorized agents to connect with the actual winners. Charging documents allege the Jaafar family collectively claimed more than $20,989,284 by cashing more than 13,000 lottery tickets between 2011 and 2019. The Jaafars were each indicted on one count of conspiracy to defraud the Internal Revenue Service, one count of conspiracy to commit money laundering, and multiple counts of filing false tax returns. Ali and Mohamed Jaafar pleaded not guilty on Monday and were released on their own recognizance. In 2019, Ali Jaafar was the top individual lottery ticket casher for Massachusetts. Mohamed Jaafar was the third, and Yousef was the fourth-highest individual ticket casher. Prosecutors added the Jaafars also lied on their taxes, falsely claiming large gambling losses of six and seven figures to offset the winnings they claimed. All three men face one count of conspiracy to commit money laundering and multiple counts of filing false tax returns.