Father and Son Convicted in Massive Lottery Money Laundering Operation
Ali Jaafar received a five-year prison sentence, and his son, Yousef Jaafar, was sentenced to over four years for money laundering the state’s lottery system. The duo was also ordered to pay $6 million in restitution and forfeit their ill-gotten gains.
A Massachusetts family, with the help of a network of convenience store owners and so-called “ten percenters,” executed what authorities have dubbed “the biggest money laundering operation that the lottery has seen.” Ali, 63, and his son Yousef, 29, faced a federal jury’s verdict in December 2022 on multiple tax evasion and money laundering charges.
The Lottery Scheme Unveiled
The family’s foray into the world of high-stakes lotteries was motivated by unknown reasons. By 2011, Ali was claiming significant sums of money from lottery tickets, with winnings soaring to $1.3 million in 2013. During this period, Yousef and his brother, Mohamed Jafaar, became part of the operation.
Their strategy involved a common practice known as “ten percenting.” Middlemen, often referred to as “ten percenters,” would purchase winning tickets for a predetermined fee in cash, enabling the original winner to receive their winnings discreetly and avoid tax liabilities. The practice, which the law considers tax evasion, saw these middlemen misrepresent their gambling losses on tax returns or provide false identification.
Investigations into such activities prompted a crackdown on high-frequency winners by the lottery commission, leading to the suspension of the Jaafars in May 2019. This prompted a thorough investigation, focusing on the family’s activities, which provided grounds for a potential money laundering case.
In the summer of 2020, Yousef’s attempt to cash more winning tickets triggered a confrontation with Dan O’Neil, a lottery official. However, the official refused to authorize the payments, leading to a standoff.
Mohamed Jaafar eventually decided to cooperate with federal prosecutors in November. In December, a federal jury convicted the father and son duo, followed by their sentencing. The family was found to have paid the owners of multiple lottery ticket-selling stores to facilitate their operations. The state lottery commission has taken measures to revoke or suspend the licenses of over 40 lottery agents connected to the scheme.
It’s not known if the family will be deported.