Date: November 7, 2022 Contact: newsroom@ci.irs.gov BOSTON — A Massachusetts man has pleaded guilty to his role in a tax fraud conspiracy arising from a "ten-percenting" scheme in which he cashed winning Massachusetts state lottery tickets on behalf of the ticket holders and claimed fake gambling losses to avoid taxes on the winnings. Mohamed Jaafar, of Watertown and Waltham, pleaded guilty on November 4, 2022 to one count of conspiracy to defraud the United States. U.S. District Court Judge Nathaniel M. Gorton scheduled sentencing for March 8, 2023. Jaafar was indicted by a federal grand jury along with two co-defendants in August 2021. Mohamed Jaafar admitted to conspiring with others to purchase winning lottery tickets from the actual winners for cash at a discount of typically between 10-30 percent of each ticket's value. This scheme, commonly referred to as "ten-percenting," allows lottery winners to avoid identifying themselves to the Massachusetts Lottery Commission or the Internal Revenue Service, thereby avoiding taxes or child support payments on their winnings. Mohamed Jaafar admitted to presenting the winning tickets to the Massachusetts Lottery Commission as his own and collecting the full value of the tickets. Mohamed Jaafar also admitted to reporting the ticket winnings on his income tax returns and improperly offsetting the claimed winnings with falsified gambling losses, thereby avoiding federal income taxes. In total, between 2011 and 2019, Mohamed Jaafar and allegedly his co-conspirators cashed more than 13,000 lottery tickets and claimed more than $20,000,000 in Massachusetts lottery winnings. In 2019, Mohamed Jaafar was by himself the third highest individual ticket casher in Massachusetts. The charge of conspiracy to defraud the Internal Revenue Service provides for a sentence of up to five years in prison, three years of supervised release, a fine of $250,000 or twice the gross gain or loss, whichever is greater, and restitution. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case. United States Attorney Rachael S. Rollins and Joleen D. Simpson, Special Agent in Charge of the Internal Revenue Service's Criminal Investigations in Boston made the announcement. Assistant U.S. Attorneys Christopher J. Markham and Kristen A. Kearney of Rollins' Securities, Financial & Cyber Fraud Unit are prosecuting the case. The details contained in the charging document are allegations. The remaining defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
