A father and son from Watertown who collected more than $20 million in lottery winnings on behalf of ticket holders, enabling them to avoid paying taxes and to collect tax refunds, were convicted of federal tax evasion and money laundering charges, according to the US Attorney’s office.
Ali Jaafar, 63, and Yousef Jaafar, 29, cashed more than 14,000 winning lottery tickets on behalf of ticket holders in Massachusetts over a nine year period, prosecutors said in a statement released Saturday.
They were both convicted by a jury on Friday of 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, the U.S. attorney’s office said in a statement.
Sentencing is scheduled for April.
The Jaafar family were among the most successful so-called “ten percenters,” people who agree to claim winning lottery prizes on behalf of gamblers to help them avoid paying taxes, in exchange for collecting anywhere from 10 to 20 percent of the winnings, the lottery said.
Mohamed Jaafar, another of Ali Jaafar’s sons, was also indicted with his father and brother last year. He pleaded guilty to a charge of conspiracy to defraud the Internal Revenue Service last month. He is due to be sentenced on March 8, the statement said.
Between 2011 and 2020, the three men conspired with others to purchase winning lottery tickets at a cash discount from gamblers all over Massachusetts, often using convenience store owners to facilitate the transactions.
They also reported the ticket winnings as their own on their income tax returns, prosecutors said. They then claimed fake gambling losses to offset the claimed winnings, avoid federal income taxes and receive tax refunds.
The three men received more than $1.2 million in tax refunds over the years, prosecutors said. In 2019, Ali Jaafar was the top individual lottery ticket casher for Massachusetts. Mohamed Jaafar was the third highest individual ticket casher and Yousef Jaafar was the fourth highest individual ticket casher.
U.S. Attorney Rachael S. Rollins said in the statement that the Jaafars’ cheated the system and took millions of hard-earned taxpayers’ dollars.
“This guilty verdict shows that elaborate money laundering schemes and tax frauds will be rooted out and prosecuted,” Rollins said.
Adam Sennott can be reached at [email protected]