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A family from Massachusetts is accused of defrauding the Massachusetts Lottery for approximately $21 million in a tax evasion scheme that happened in the last decade.
It may seem hyperbole, but cashing more than 13000 winning lottery tickets worth $21 million over a period of eight years is possibly not in the "impossible section" for this family! Such a great number of lottery wins can definitely be attributed to sheer luck!
Ali Jaafar, 63, and his sons Mohamed Jaafar, 31, and Yousef Jaafar, 28, undertook a ticket cashing scheme commonly known as "ten-percenting", where scammers would buy winning lottery tickets from players for cash at a discount between 10-20% of the ticket's value. This means that the original winners of the lottery tickets would not have to report the winnings on their tax returns or pay owed child support. The fraudsters would then present these winning tickets as their very own, claim the prize themselves, and report the winnings on their tax returns, thus avoiding federal income taxes.
From 2011 to 2019, Ali paid just $24,500 in federal taxes on the $15 million in the winnings. Moreover, he received $886,261, back from the federal government in the form of refunds. The suspicions of these fraudulent activities did not pop out of anywhere. In 2019, Ali was rewarded as the "top individual lottery ticket casher", Mohamed ranked third, and Yousef ranked fourth. In total their winnings for the year alone summed up to $5.8 million. Since then the Massachusetts State Lottery Commission had their eye on Jaafar's even suspended them from cashing in the tickets.
In retaliation, the Jaafar family sued the Lottery.
In 2018, the Lottery introduced a policy that aimed at players who won with a frequency that was factually or statistically improbable. This enables the lottery to freeze payouts for 90 days for anyone who claims at least 20 prizes valued at $1,000 or more in a year. If you are in violation of this policy you should expect a hearing and a potential suspension regarding this matter.
Even with the Jaafar family's case, the prize claims were without a doubt factually impossible. According to State prosecutors, Ali would have to purchase 12,411 tickets per day, which equals to purchasing 517 tickets per hour and more than 8 tickets per minute. On Monday, the Jaafars were collectively charged for over a dozen of frauds, money laundering, and tax evasion.
As per the United States Department of Justice, one act of conspiracy to defraud the IRS comes with a maximum sentence of five years in prison, one act of money laundering has a sentence of a maximum of 20-years, and one act of filing false tax returns provides for a maximum of three years sentence. The accused is also liable to face additional supervised release, fines, and restitution for each act of committing fraud.
Here is why we always propagate: don't fall for such luring situations! Mark your lottery numbers mindfully and claim your lottery win rightfully!
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