The 12 individuals were indicted Friday by a statewide grand jury. The only real obstacle is buying enough tickets. What were once sporadic efforts to beat the system have grown into an entire industry. Steven Grossman, the then-state treasurer, had to announce that the game will get phased out within a year. Mohamed Jaafar was the third highest individual ticket casher and Yousef Jaafar was the fourth highest individual ticket casher. Home | Massachusetts Lottery Supporting Communities MSLC meeting, Tuesday February 28. When James Harvey first started looking at the lottery in 2005, hed made a trip to the town of Braintree, where the lottery offices were based. The Selbees took on investors, and thenfaced another challenge: a group of students from MIT who had also figured out the odds, formed an organization, attracted investors, and started making millions. The Massachusetts Lottery sold its first ticket on April 6th, 1972, with seven people winning $50,000 each in "the Game" drawing. The 12 defendants include store owners, employees and ticket-cashers who are alleged to have been involved from April 2020 through May 2021 in a "ten-percenting" scheme in which they claimed the prizes associated with winning Lottery tickets instead of the true winners in exchange for 10 to 20% of the winnings, Healey's office said. Massachusetts then joined Mega Millions in 2010 and launched the regional Lucky for Life game in 2012. July 2 (UPI) --A Massachusetts man said a snap decision to buy a scratch-off lottery ticket from a convenience store led to his winning his second $1 million jackpot in four years.Stephen Toto of . MDGolam Talukder-Manik, 57, of Lynn is facing one count of conspiracy to evade taxes. Twelve men along with three stores in Chelsea, Boston and North Reading have been indicted in an alleged money laundering scheme to hide lottery winnings and pilfer tax revenue from the state. And they doubted too many people would have given up the opportunity they'd taken, if they knew it existed. "How do I become a member of the [Selbees'] club when I retire?" ) or https:// means youve safely connected to the official website. All were charged with conspiracy to evade taxes and may have their licenses revoked after a full review is completed. Mass.gov is a registered service mark of the Commonwealth of Massachusetts. Any attempts to fraudulently claim lottery prizes to abet in illegal activities including the avoidance of taxes or other debts owed to the Commonwealth are viewed by the Massachusetts State Lottery as serious offenses, said Michael Sweeney, executive director of the Massachusetts State Lottery. He is an attorney that specializes in estate planning. The Boston Globe stories, written by the same Spotlight team that had exposed child sexual abuse in the Catholic church (and served as the basis for an Oscar-winning movie)--foretold the end of the story. "I knew it would work.". He has been identified as an employee of Grab N Go located at 367 Washington Avenue in Chelsea.The business Underground Express, located at 31 Winter Place in Boston, is facing one count of conspiracy to evade taxes.The business Richdale, located at 4 Lowell Road in Reading, is facing one count of conspiracy to evade taxes.The business NT Lucky Variety, located at 137 Arlington St. in Chelsea, is facing one count of conspiracy to evade taxes.Healey's office alleges that from April 2020 through May 2021, the defendant who are ticket-cashers, store owners or employees purchased winning lottery tickets from the true winners for cash, at a discount to the value of the tickets. By the end of the month, they planned to have thousands more dollars in winnings. Massachusetts Lottery Games and Drawing Schedules Mega Millions Mega Millions is a multi-state lottery game enjoyed all over the US. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. The scheme is commonly known as ten-percenting. Its a practice where individuals claim lottery tickets and retain a percentage of the winnings, sometimes as high as 10% or 20%, as a fee from the true winner. Using his mathematical abilities, Jerry finds a way to ensure profits while buying an enormous number of WinFall tickets. Healey's office said Lottery retailers and employees would direct winning tickets and their holders to Frank Obey, 80, of Lynn, and Kenneth Grossman, 69, of Revere. ", The Daily Digest for Entrepreneurs and Business Leaders, "Oh, I knew it would work," the wife said. Box 859036 Braintree, MA 02185-9036 Keep a copy of all claim documents for your records. In some cases, the true winner might be attempting to evade past-due child support payments, taxes or other debts which the Lottery is legally obligated to help collect, officials have said, or the claims may be part of a money laundering scheme. This scheme, commonly known as ten-percenting, is a practice where individuals claim winning lottery tickets and retain a percentage of the winnings, sometimes as high as 10 or 20 percent of the proceeds as fee from the true winner. The arrangement allows for the true lottery winners to avoid financial obligations, including state and federal taxes.Related content: Father, sons face federal charges in $21M Massachusetts state lottery scamAccording to the AG's office, store owners and employees funneled winning tickets to Obey, Grossman and their runners. A recent report by the states inspector general reveals more details about the scheme, including the fact that the Massachusetts Lottery knew of the students ploy and for years did nothing to stop it. The individual floors have names, too. The details contained in the charging document are allegations. She holds a bachelor's degree from Tufts University and a master's degree from Northwestern University. BOSTON (USDOJ) A father and his two sons were charged yesterday in connection with a ten-percenting scheme in which they allegedly cashed winning Massachusetts state lottery tickets on behalf of the ticket holders to avoid taxes on the winnings. Despite the ongoing competition, some betting syndicates have managed to repeatedlyand legallyturn a profit. Both are alleged to have circumvented the legal ticket-claiming process. This scheme is commonly known as "ten-percenting" and is a practice where individuals claim winning lottery tickets and retain a percentage of the winnings, sometimes as high as 10% or 20% of the proceeds, as a fee from the true winner. The story sparked widespread controversy and the Massachusetts politicians ended up criticizing the operation of the game. They decided that WinFall would avoid this awkward situation. If they matched some but not all the numbers, they won a smaller sum. In-depth news coverage of the Greater Boston Area. He began analyzing well-known lottery games such as Powerball and MegaMillions, but soon became intrigued by Cash WinFall, a game that was introduced in 2004 and was unique to the state of Massachusetts. Directed by David Frankel, Paramount+s comedy film Jerry & Marge Go Large follows Jerry Selbee, who discovers a flaw in the system of a lottery game titled WinFall. Maybe Uncle Ben was right: With great power comes great responsibility. This scheme is commonly known as "ten-percenting" and is a practice where individuals claim winning lottery tickets and retain a percentage of the winnings, sometimes as high as 10% or 20% of the proceeds, as a fee from the true winner. The roll-down happened when the jackpot money hit $2 million. Ali Jaafar, 63, and his two sons Mohamed Jaafar, 31, and Yousef Jaafa, 28, were charged on August 23 with over 12 counts of fraud, money laundering, and tax evasion in what officials reportedly dubbed a "ticket cashing scheme." The Massachusetts State Lottery was created in 1971 to generate local aid revenue for our 351 cities and towns through state-run games of chance. Buying $600,000 worth of tickets would bring a 15%20% return on investment, according to the New York Daily News. The charge of conspiracy to commit money laundering provides for a sentence of up to 20 years in prison, three years of supervised release, a fine of $500,000 or twice the value of the property involved in the transaction, whichever is greater, restitution and forfeiture. Watch McMillion$ for Free Start from the beginning and watch the first episode of McMillion$ for free. Community Rules apply to all content you upload or otherwise submit to this site. It also includes two actual Lottery winners charged with tax evasion or failure to file a tax return for having circumvented the legal ticket-claiming process. The Massachusetts State Lottery was created in 1971 to generate local aid revenue for our 351 cities and towns through state-run games of chance. This also required a 12-hour drive each way to play--standing in convenience stores, for days at a time. Several other syndicates sprang up to capitalize on the Cash WinFall loopholes, but the MIT group remained one of the most successful and innovative. The information was a boost for the MIT group, which until then had been relying on their own calculations. If you purchase a product or register for an account through one of the links on our site, we may receive compensation. Welcome to the official Massachusetts Lottery App! In August, federal prosecutors indicted a Watertown man and his two sons on a raft of tax fraud and money laundering charges related to what was alleged to be an elaborate Lottery prize-claiming scheme in which they cashed more than 13,000 Lottery tickets and claimed nearly $21 million in winnings between 2011 and 2019. It has been called Dr. Seuss Day because of this. This article has been adapted from Adam Kucharski's book, The Perfect Bet: How Science and Math Are Taking the Luck Out of Gambling. The store sold $1.7 million in lottery products in 2020, lottery sales records show. The problem with rollovers is that winnerswho are good publicity for a lotterycan be rare. "I knew it would work.". Shop Our Favorite February Amazon Deals Before the Sales End, The 14 Best Mineral Sunscreens of 2023, According to Pros, 14 TikTok-Famous Cleaning Products That Actually Work, According to Our Experts, 14 Best Healthier Candy Alternatives of 2023, According to Taste Tests. In 2005, another plan started to take shape in the corridors of Random Hall. Hearst Television participates in various affiliate marketing programs, which means we may get paid commissions on editorially chosen products purchased through our links to retailer sites. State Attorney General Maura Healeys office said the con, allegedly perpetrated by store owners and clerks along with two Massachusetts State Lottery winners, involved laundering lottery winnings and lying under oath on numerous lottery claim forms.. Here's the process for claiming Massachusetts Lottery prizes. The 12 defendants were indicted Friday by a Statewide Grand Jury on the following charges: False Statement Under Penalty of Perjury (2 counts), Attempting to Impede/Obstruct Administration of Massachusetts Tax Laws, (Employee of Richland Convenience Store located at 332 Nahant Road in Nahant), (Employee of Robinsons News Convenience Store located at 1556 Eastern Avenue in Malden), (Employee of Grab N Go located at 367 Washington Ave in Chelsea), Underground Express, 31 Winter Place in Boston, NT Lucky Variety, 137 Arlington Street in Chelsea. In reality, Jerrys introduction to the lottery game began with Michigan-based Winfall. There was nothing illegal about what the Selbees or the MIT group were doing, but there was a perception that they were juicing the odds in their favor--and away from the "little guy" player, who might picking up a couple of lottery tickets on the way home from work. Joseph Daniel Malone (born November 18, 1954) is an American businessman, former Treasurer and Receiver-General of Massachusetts, and a former member of the Republican Party. Based upon their submitted lottery claims, in 2019, Ali Jaafar was the top individual lottery ticket casher for Massachusetts. The business Underground Express, located at 31 Winter Place in Boston, is facing one count of conspiracy to evade taxes. While most of the men are also charged with conspiracy to commit tax evasion, Frank Obey, 80, of Lynn; Kenneth Grossman, 69, of Revere; and William McNamara, 67, of Revere; face additional charges including perjury, attempting to impede/obstruct tax laws and money laundering. A dozen people and three stores were indicted Friday by a Massachusetts grand jury in connection to what Attorney General Maura Healey's office called "an ongoing scheme to rob the state of tax revenue by laundering lottery winnings and lying under oath on numerous lottery claim forms." Looking at past draws, the group found that if the jackpot failed to top $1.6 million, the estimate for the next prize was almost always below the crucial value of $2 million. The other defendants, who each face a single charge or conspiracy to evade taxes, are John Heller, 73, of Revere; Karl Voelker, 67, of Boston; Paritosh Patel, 48, of Reading; Nelson Tejada, 43, of Chelsea; MDGolam Talukder-Manik, 57, of Lynn; Ghanshyam Patel, 45, of Malden; and Muhammad Khan, 52, of Medford. This arrangement allows the true winners to avoid financial obligations, including state and federal taxes, officials said. According to the AG's office, store owners and employees funneled winning tickets to Obey, Grossman and their runners. The charges are the result of an investigation by members of the Massachusetts State Police assigned to Healey's office and the State Treasurer's Office of Investigations, as well as the MSP Gaming Enforcement Division and the Massachusetts State Lottery Commission. He wanted to get hold of a copy of the guidelines for the game, which would outline precisely how the prize money was distributed. State Lotteries AL AZ AR CA CO CT DE DC FL ID IL IN IA KS KY LA ME MD MI MN MT NE NH NM NY OH Instead of taking $25,000 a year, he decided to cash out a one-time . The latest Massachusetts Powerball drawing took place on Saturday, February 25, 2023, offering a jackpot worth $120.9 Million. Mega Millions players select five numbers 1 to 70 and one Mega Ball number 1 to 25. The ticket cost $2 and the player could pick six numbers between 1 and 46. Suggestions are presented as an open option list only when they are available. In February 2005, Harvey formed a betting group with some of his fellow MIT students. They come in multiple price points: $1, $2, $5, $10, $20 and even $30. Obey, Grossman and "their runners" then "presented the Massachusetts State Lottery Commission with false claim forms in which they declared, under the pains and penalties of perjury, that the winnings were their own," Healey's office said. Why are supply rates going down for gas but not electricity? You can play your numbers in up to 30 consecutive draws. Several years ago, while doing research for a school project, a group of MIT students realized that, for a few days every three months or so, the most reliably lucrative lottery game in the country was Massachusetts Cash WinFall, because of a quirk in the way a jackpot was broken down into smaller prizes if there was no big winner. Ghanshyam Patel, 45, of Malden, is facing one count of conspiracy to evade taxes. Healeys office alleges that from April 2020 through May 2021, the defendants all ticket-cashers, store owners or employees purchased winning tickets from the true winners for cash at less than the tickets values. All of these charges are allegations, and the defendants are presumed innocent until proven guilty. Peter Marano, 52, of Boston, was charged with tax evasion. According to Healeys office, the scheme involved a practice known as 10 percenting, a term for when individuals claim winning lottery tickets and keep a portion of the prize sometimes as much as 10 or 20 percent as a fee from the true lottery winner. Two true winners, Marano and Derebala, were identified and stand charged, respectively, for tax evasion and failing to file a tax return. one lottery official joked in an email that later became public. As he studied the game, Harvey realized that it was easier to make money on WinFall than on other lotteries. Spillane's office is actually in Hanover. (Employee of Grab N Go located at 367 Washington Ave in Chelsea, The ten-percenting scheme is designed to defeat government collection of back taxes through the Department of Revenue (. Contact the Attorney General's Office at (617) 727-2200, Twelve Individuals and Three Stores in Chelsea, Boston, and North Reading Indicted in Connection With Perjury and Tax-Avoidance Lottery Scheme. If they matched all six in the draw, they won a jackpot of at least half a million dollars. 2023 TIME USA, LLC. with approximately 98 percent of funds generated go directly back into the economy through prizes (73 percent),. Problem Gambling Helpline: 1-800-327-5050 www.gamblinghelplinema.org Are They Still Together? By taking these types of necessary actions to prevent crimes, we are maintaining the integrity of the Lottery and the best interests of the people of the Commonwealth, state Treasurer Deborah B. Goldberg, chair of the Massachusetts State Lottery Commission, said in a statement. The defendants will be arraigned in Suffolk Superior Court at a later date. 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