A father and his son will go to prison for a $20 million lottery

CNN
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A Massachusetts father and son were sentenced in federal court on Monday for a scheme that saw the couple illegally claim more than $20 million in lottery winnings and lie on their tax returns to dodge more than $6 million in federal taxes, prosecutors said.

Ali Jaafar, 63, was sentenced to five years in prison while his 29-year-old son, Yousef Jaafar, was sentenced to 50 months in prison, the US Attorney’s Office for the District of Massachusetts said in a statement Monday. They were were also ordered to pay more than $6 million in restitution and forfeit their benefits from the scheme.

In December, the two were sentenced one count of conspiracy to defraud the Internal Revenue Service, one count of conspiracy to launder money and one count of producing a false tax return.

“This case is, at its core, an elaborate tax evasion. For a decade, this father-son team defrauded the Massachusetts State Lottery Commission and the IRS to pocket millions of hard-earned taxpayer dollars,” Acting U.S. Attorney Joshua S. Levy said in the Press release. “These defendants worked together to recruit an extensive network of co-conspirators and spread their lottery scam across Massachusetts, evading detection by repeatedly lying to government officials.”

Valerie S. Carter, attorney for Ali and Yousef Jaafar, told CNN in an email Tuesday that the Jaafars “intend to appeal to the First Circuit Court of Appeals.”

Mohamed Jaafar, another son of Ali Jaafar also involved in the plot, pleaded guilty last year of conspiracy to evade taxes and will be sentenced in July. CNN has reached out to his attorney for comment.

The men accounted for three of the top four individual lottery ticket collectors in the state in 2019, according to the U.S. Attorney’s Office.

“This case is an example of the extensive efforts the Lottery will make to partner with law enforcement to help prevent illegal activity. This decision is the culmination of years of hard work to maintain the integrity of the lottery,” said Deborah B. Goldberg, state treasurer and receiver general and chair of the lottery commission.

“From at least 2011 through at least June 2020, the defendants conspired with others known and unknown to the grand jury to launder funds from Massachusetts state lottery winnings to others,” a statement said. indictment for all three.

The men would buy winning lottery tickets from people across the state who wanted to sell their ticket for cash back instead of claiming their prize, the U.S. Attorney’s Office said in its press release.

That meant the real winners avoided being identified by the state lottery commission, which is required to “withhold unpaid taxes, back taxes and child support” before paying the prize, according to the press release.

After purchasing the discounted tickets from the winners, with the help of convenience store owners who would “facilitate the transactions”, the defendants would claim the cash prize from the commission as their own, the statement added.

Dozens of lottery retailers who participated in the program will have their lottery agent licenses revoked by the Massachusetts State Lottery Commission, the US attorney’s office said.

Prosecutors allege that the Jaafars illegally cashed in more than 14,000 lottery tickets totaling more than $20 million under the “10% elaborate scheme”.

Prosecutors say the defendants further profited by “reporting the winnings on their tax returns and claiming equivalent gambling losses as compensation, thereby avoiding federal income tax and receiving fraudulent tax refunds.”

“Instead of using their business acumen and skills to create a legitimate multi-generational family business, the Jaafars ran an elaborate tax and lottery scam for a decade, creating a vast network of co-conspirators to continue their illegal activities” , Joleen Simpson, special agent in charge of criminal investigations for the IRS in Boston, said in the statement.