Waltham Man Charged In $20M MA Lottery Scam

Waltham MA

25 August, 2021

10:52 AM

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WALTHAM, MA — A Waltham man has been charged in connection with illegally claiming over $20 million in Massachusetts lottery winnings on behalf of the ticket holders to avoid taxes, said Acting U.S. Attorney Nathanial Mendell in a news release Monday. Mohamed Jaafar, 30, of Waltham and Watertown, along with his father Ali Jaafar, 62, and brother Yousef Jaafar, 28 of Watertown, were each indicted on one count of conspiracy to defraud the IRS, one count of conspiracy to commit money laundering, and multiple counts of filing false tax returns. According to the news release, the Jaafars are accused of running a "ten-percenting" scheme, where they purchase lottery tickets from the actual winners for cash at a 10 to 20% discount. This allows the ticket holders to avoid reporting the winnings, which are fully taxable in Massachusetts. Prosecutors say the Jaafars would then present the winning tickets to the Massachusetts Lottery Commission as their own to collect the full value and improperly offset the claimed winnings with purported gambling losses to avoid federal income taxes. The Jaafars allegedly ran this operation from 2011 to 2019 and claimed more than $20,989,284 from over 13,000 lottery tickets. In 2019, Ali Jaafar was the top individual lottery ticket casher for Massachusetts, Mohamed Jaafar was the third, and Yousef Jaafar was the fourth highest individual ticket casher.