Three Massachusetts family members were charged Monday with multiple counts of fraud after they cashed nearly $21 million in winning the state lottery tickets.
Ali Jaafar and his two sons, Mohamed Jaafar and Yousef Jaafar, are accused of committing fraud after cashing in nearly 13,000 state lottery tickets valued at roughly $21 million. The three accused committed the lottery fraud over eight years, and the action mostly involved scratch-offs.
In 2019, Ali Jaafar was the leading lottery ticket casher for The Bay State.
While it is yet to see the possibility of winning lottery tickets so frequently, the executive director of the Massachusetts Lottery said that “the reality is, it’s zero.”
However, the three accused pleaded not guilty to all charges.
The trio winning 13,000 Lottery Tickets in Eight Years
Between 2011 and 2019, Jaafars cashed more than 13,000 lottery tickets, claiming over $20.9 million in lottery winnings, according to federal prosecutors. In 2019, the father was the top individual lottery ticket casher in the whole state, his son Mohamed Jaafar was the third-largest, and Yousef Jaafar the fourth-largest, according to the prosecutors.
Michael Sweeney, executive director of the Massachusetts State Lottery Commission, said that several individuals stood out for the frequency and the number of winnings, which he said is really set off for him, “a red flag.”
He said it’s just impossible.
Ali Jaafar, 62, and Yousaf Jaafar, 28, and Mohamed Jaafar, 30, each were indicted on one count of conspiracy to defraud the IRS, one count of money laundering, and several counts of tax fraud.
After they pleaded not guilty Monday, they were released on their own recognizance.
How Was the Family Doing the Lottery Fraud?
According to the prosecutors, the father and sons had the means to cash the lottery tickets by having agents and convenience store staff purchase winning tickets from the ticket holder for cash at a discounted price, providing the lottery commission with false claim forms, and more.
Between those eight years, Ali Jaafar cashed in over 10,000 lottery tickets worth at least $600 or a total of $15 million, according to court documents. Mohamed Jaafar cashed nearly 2,500 lottery tickets between 2012 and 2019, totaling $3.3 million, and Yousef cashed in 1,360 tickets between 2013 and 2019, totaling $2.5 million, the US Attorney’s Office said.
The Massachusetts Lottery expects winners to complete a form declaring the winners’ name and all the other relevant details including, and they are the sole recipient of the payment and “not claiming the prize to assist another in avoidance of financial obligations.”
But some lottery winners seek to avoid the Internal Revenue Service (IRS) through “ten-percenting” in order to avoid previous taxes they owe the state or child support.
Like other states, in Massachusetts, money can be deducted from lottery winnings over a specific threshold if the ticket holder owes money in unpaid taxes or child support. In the Bay State, the threshold is $600.
Lottery winners, who are liable to this amount, occasionally sell their tickets at a discount to an underground ticket-cashing agent. The casher usually takes 10% of the winnings.
The state lottery had provisionally banned the father sons trio from cashing out in 2019 when they felt the elder Jaafar was the leading individual ticket casher that year. His two sons were the third and fourth.
In response, the Jaafar family had sued the lottery, requesting an injunction that would allow them to continue cashing out their winnings. They failed.
Under the Massachusetts Lottery regulations, winners of more than 20 prizes of at least $1,000 in a single year can be reviewed by the director of the lottery, which can lead to temporary bans.
What Do the Jaffars Say?
When asked to respond, Mahamed Jaafar’s lawyer did not comment. Ali Jaafar’s attorney also did not respond to a phone call, while Yousef Jaafar has yet to list an attorney.
According to prosecutors, the Jaafars and co-conspirators are accused of presenting the winning tickets to the state lottery as their own to claim the full value of the tickets.
The father and sons also reportedly declared the ticket winnings on their income tax returns in order to avoid federal income taxes.
Sweeney said the Massachusetts State Lottery views the attempts made by Jaafars as serious offenses. When asked if other winners are being probed for the same kind of scheme, Sweeney said, “Stay tuned. More to come.”