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Illegal Lottery Conspiracy Leads to Prison Time


Illegal Lottery Conspiracy Leads to Prison Time

In 2022, a federal jury found Yousef Jaafar, 29, and his father, Ali Jaafar, 63, guilty of defrauding the IRS, engaging in a conspiracy to commit money laundering, and filing false tax returns. The father and son operated an intricate lottery scam for ten years, but now they are bound for prison.

On May 22, US District Court Judge Nathaniel M. Gorton handed down the sentences for both individuals. Ali was sentenced to five years in prison, while Yousef received slightly over four years. Additionally, they are required to forfeit the profits obtained through their fraudulent scheme and make restitution in the amount of $6,082,578.

Prosecutors revealed that the Jaafar men collaborated to purchase winning lottery tickets at a reduced cash price from gamblers throughout Massachusetts who wanted to avoid reporting their winnings to the state lottery commission, thus evading taxes and child support payments. They enlisted the help of convenience store owners to facilitate these transactions.

Following their acquisition of tickets from legitimate winners, the Jaafar family cashed them in with the lottery commission, receiving the full amount of the winnings. They reported these winnings on their taxes but utilized gambling losses as deductions to offset the taxes they owed. Their scheme involved the purchase of over 14,000 lottery tickets between 2011 and 2020, resulting in claimed winnings exceeding $20,000,000. However, this fraudulent activity caused the government to suffer losses exceeding $6 million.

In November 2022, another member of the Jaafar family, Mohamed Jaafar, pleaded guilty to conspiring to defraud the IRS. His sentencing is scheduled for July 25, 2023. Records indicate that Mohamed was the third-highest individual in the state in terms of cashing lottery tickets, while his brother Yousef ranked fourth, and their father Ali held the top position.

IRS Special Agent Joleen Simpson strongly criticized the actions of the Jaafar family, denouncing their criminal behavior. She highlighted that instead of utilizing their skills to establish a legitimate and sustainable multi-generational family enterprise, they chose to engage in fraudulent activities, involving an extensive network of co-conspirators. Simpson emphasized that even though tax code violations are often seen as victimless crimes, they harm law-abiding citizens when individuals attempt to manipulate the system.

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