A father and son in Massachusetts were convicted in a multimillion-dollar scheme in which they cashed winning lottery tickets on behalf of the ticket holders to avoid taxes and receive tax refunds.
Ali Jaafar, 63, and Yousef Jaafar, 29, were found guilty by a federal jury on Friday on several tax evasion and money laundering charges, according to the U.S. Attorney’s office.
Investigators said the Jaafars conspired with others to purchase winning lottery tickets from actual winners for cash, at a discount that was typically between 10-20 percent of each ticket’s value, which allowed the ticket holders to avoid reporting the winnings on their tax returns – a scheme commonly known as ’10-percenting.’
The father and son then presented the winning tickets to the Massachusetts Lottery Commission as their own and collected the full value of the tickets.
They also reported the ticket winnings as their own on their income tax returns and improperly offset the claimed winnings with gambling losses, thereby avoiding federal income taxes, investigators said.
Both men were convicted on one count of conspiracy to defraud the Internal Revenue Service, one count of conspiracy to commit money laundering and one count each of filing a false tax return. Sentencing is scheduled for April.
Ali Jaafar, 63, and Yousef Jaafar, 29, in a lottery scheme in which the father and son cashed winning lottery tickets on behalf of the ticket holders to avoid taxes and receive tax refunds
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