The visited lots of convenience stores
In our latest tale of gambling-related crime, this writer’s first thought is: “I mean, you knew you were going to get caught eventually, right?”
Over the span of eight years, Ali Jaafar, now 63, and his sons Mohamed Jaafar, 31, and Yousef Jaafar, 28, cashed in over 13,000 lottery tickets in Massachusetts, banking almost $21 million. And when I say, “you were going to get caught eventually,” it is because nobody runs that hot. They were pretty clearly doing something illegal.
And sure enough, on Monday, an indictment was unsealed in U.S. District Court in Massachusetts, charging the three men with numerous counts of fraud, money laundering, and tax evasion.
Cashed others’ tickets, committed tax fraud
The scheme was quite simple, really. In Massachusetts, the lottery will check to see if anyone cashing a ticket for more than $600 – scratch off or numbers lotto – has unpaid federal taxes or child support. If so, their winnings will be garnished. To Jaafars took advantage of this by cashing tickets for other people to help them avoid garnishment and keeping a portion of the winnings as a fee.
On top of that, the Jaafars falsely reported massive gambling losses on their tax returns to reduce the taxes they themselves had to pay on their winnings. The most difficult about the scam, it seems, is developing a large enough client list that would allow them to cash over 13,000 lottery tickets.
The indictment laid out how little in taxes the trio paid, despite raking in so much money. From 2011 to 2019, Ali Jaafar paid less than $24,500 on $15 million in winnings and received $886,261 in tax refunds for the fake gambling losses he claimed. Mohamed Jaafar paid less than $21,700 on $3.3 million in lottery winnings and received $106,032 in tax refunds. Yousef Jaafar paid less than $10,700 on $2.4 million and got $185,951 in refunds on his false gambling loss claims.
The state eventually caught on
They were caught because the state keeps track of lottery ticket redemptions. Anyone who claims at least 20 prizes of $1,000 or more in a year (already you’re either really lucky or have spent a ton of money…or, in this case, are a crook) gets investigated. If their win rate is determined to be statistically improbable, they can be suspended for three months from claiming prizes over $600. Strike two and it’s a six-month ban, strike three it’s a one-year ban.
All three Jaafars had been suspended once, so they were definitely on the lottery’s radar. Ali was the “top individual lottery ticket casher” in Massachusetts in 2019. Mohamed was third and Yousef was fourth.
Ali and Mohamed were arrested, pleaded not guilty in court (remotely), and were released on their own recognizance. The New York Times, which reported on the case, did not have information about Yousef.