![]() The Jafaars would pay the convenience store owners for their help, according to prosecutors.Īfter they illegally claimed multiple ticket holders’ lottery prizes as their own winnings, they made more money “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,” the release said.Īli and Yousef Jaafar got away with tax fraud for years by lying to their accountants, according to prosecutors.Īhead of Ali Jaafar’s sentencing, his attorneys argued in a sentencing memo for a sentence of home confinement instead of incarceration, citing his client’s lack of a prior criminal history, his unlikeliness to be a repeat offender, his deteriorating health and his position as the main supporter of his wife. The store owner refused at first, but Ali Jaafar kept asking her to do so, and she eventually took part in his scheme, the sentencing memo says. ![]() He was able to find lottery prize winners and buy their tickets because he knew several convenience store owners and operators who sold the tickets in Massachusetts, the sentencing memo says.Īt trial, one convenience store owner testified that Ali Jaafar asked her if she could let him know when a customer won the lottery and preferred a discounted, cash payment instead of officially claiming the ticket, according to the sentencing memo. With ten-percenting schemes, “the ticket purchasers typically keep between 10-20 percent of each ticket’s value” and “allows the real gamblers to avoid reporting the winnings on their tax returns,” prosecutors explained in an earlier news release.Īli Jaafar recruited his two sons to engage in the scheme, according to a sentencing memo submitted by the government. These ticket holders preferred to sell their tickets for a discounted price instead of claiming them at the state’s lottery commission - which can withhold taxes and other payments before issuing the prize money, according to officials. The Jaafars engaged in what’s known as a “ten-percenting” scheme by working with a “network” of individuals, including convenience store workers, to buy winning lottery tickets from ticket holders at a discount, according to officials. The trio’s lottery scheme - which helped them avoid paying taxes and caused them to wrongfully receive $1.2 million in tax refunds - has resulted in the state lottery commission revoking or suspending the licenses of more than 40 state lottery agents, prosecutors said. His sentencing hearing is set for July 25, according to officials. Meanwhile, Mohamed Jaafar pleaded guilty to one count of a conspiracy to defraud the IRS in November, prosecutors said. McClatchy News contacted attorneys representing the Jaafars for comment on May 23 and didn’t immediately receive a response.Ī jury found Ali and Yousef Jaafar guilty of conspiring to defraud the Internal Revenue Service, conspiring to commit money laundering and filing false tax returns in December, McClatchy News previously reported. “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.” ![]() ![]() “This case is, at its core, an elaborate tax fraud,” Acting U.S. Attorney’s Office for the District of Massachusetts announced in a news release. Now, a judge has sentenced Ali and Yousef Jaafar, both of Watertown, to five years in prison and 50 months in prison, respectively, on May 22, the U.S. ![]()
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