EITM: Massachusetts State Lottery Scam 10/26/23

Mass cash!

Episode Transcript

(00:00):
Story out of Watertown, Massachusetts thatis fascinating to me. And it's all
about the Jaffar family, father andtwo sons. Did we know this family?
No, no, no, no, no, no, you're just
giving Yeah, that's their name.It's the Jaffar family. They have worked
a scam in the lottery world,not like powerball and Mega millions, like

(00:25):
like scratch scratches and like local lottery. Guess how guess how much money they've
what's the right word one? Yeah, okay, guess how much money they've
made in the last decade by kindof frauding the system. They're in trouble.

(00:46):
I mean, when you're talking scratchers, is it a few one hundred
thousand dollars A couple hundred thousand dollarsover a decade, that'd be a great
haul. Not if you're the Jaffars, though, not enough. No no,
no, no, no, no, no. Twenty million dollars.
Oh jesus, how twenty million dollars? No? Seriously, how it is

(01:06):
un The story is unreal. Thestory is unreal, and it got me
thinking about two things. If youwork at a it's all this thing called
the ten ten percenters, which goesback to like the early days of like
horse racing. I'm telling you it'sit's fascinating. But it got me thinking

(01:30):
of two things. Number One,if you work for the like the lottery
people, like if you if youwin money on a scratcher or something and
it's over a certain amount, youhave to go to it and forget take
power ball and take mega millions,put them over here. I'm not even
dealing with that. But if Igo into my seven eleven right and I

(01:51):
win, I get a scratcher,and let's say I win one thousand dollars,
you have to go get that atthe lottery headquarters, Like you don't
you can get that, my god, behind the counter doesn't just go here
here you go, here's a thousandbucks. And I think, at least
in Massachusetts, I think that cutoff is six hundred dollars. That if
you win more than six hundred dollarsyou have to go to the lottery offices.

(02:12):
Yeah, so it got me thinking, if you work at the lottery,
do you know about scams like thiswhere people and then I'll get to
the scam, but do you dothey teach you that right up front?
Because that's how these guys ended upgetting caught. Is like the Jaffars are
here going to say if you've seedifferent members of that same family come at

(02:34):
all the time. Or were theywinning on some of those scratchers that give
you like fifty thousand dollars, Yeah, you know in some cage as many
because you're you're you're only redeeming ahandful of tickets. Oh, this is
a handful over the decade that theywon twenty million dollars, they redeemed fourteen
thousand tickets. Okay, Yeah,they definitely know who they are. Then

(02:54):
they said they ran numbers that basedon like they had like experts run numbers
that if you just did it regularly, just as a regular person, and
you went in and you randomly boughttickets and stuff like that. To win
at the rate the Ja'afars were cashingin tickets, you would have to purchase

(03:15):
twenty two, eight hundred and fiftynine tickets every day, or nine hundred
and fifty two tickets every hour,which is sixteen tickets every minute, every
minute of every day, twenty fourhours a day. Yeah, I'd set
the lottery. Nos, so theyknow who they are, yeah, or
at least eventually knew, but doesalso, So that's number one. Number

(03:38):
two, does everybody who works ata convenience store, a gas station,
wherever lottery tickets are sold do theyknow about this scam? And the scam
is easy? Well, you saidsixteen tickets a minute. That's not easy.

(03:58):
No, no, no, no, no no. How they end
up getting that money is so easy? All right, tell us how it's
done. So let's pretend that let'slet's say, let's let's say it's at
a Do you want the history ofit or how it's being done? Now,
how they did it? Yeah,okay, so let's let's use I'm
just going to use seven eleven.I don't know if that's what they use,
but I'm using my favorite store.So seven eleven. I go in

(04:23):
there and I buy scratchers, right, just like everybody else does. I
go in there and I buy ascratcher. So you're the customer. I'm
the customer, okay, I'm acustomer. And I hit it for one
thousand dollars right, and I'm soexcited, and I tell the guy up
front, I got it, Igot it. I want a thousand dollars
and he's like, great, youhave to go. You have two choices

(04:45):
here. You have to go tothe lottery and you'll have to get the
get the money. They're going toattach you for it, right or and
and by the way, the taxcut is going to be like thirty percent
or whatever it is. Right orif you want, I know somebody that
can kind of middleman this, they'llbuy the ticket from you for ten percent

(05:11):
for nine hundred dollars. So theclerk is part of the scam. Yes,
and the clerk gets paid off.Now that's one scenario. The other
scenario is sometimes these ten percenters willjust walk like loiter at the seven to
eleven and see people that are inthere buying scratchers and go, hey,

(05:32):
listen, if you ever win,if you don't want to give up thirty
percent, I'll buy that from you. Wow. So the jaffars, if
you want a thousand dollars, theJaffars would go either they have made the
connection or the person behind the counterthey end up getting like fifty or one
hundred bucks in their pocket for turningthem on to me, just as being

(05:55):
like the middleman. So the Jaffarswould go in and go, hey,
listen, I'll buy that from youfor nine hundred dollars. The person's like,
sweet, so I get that withouthaving to there's no taxes. And
they're like yeah, no, no, no no, we'll take the tax
it. We'll do all of that. Yeah, so give me to that

(06:15):
part. How does taking the taxthat lead to a profit If they've bought
the ticket for nine hundred, they'renot getting nine hundred or even more than
that back from the lottery at sayssomeone here. Hold on, uh pleasant,
unremarkable. The winner produces the ticketat the agent sitting at the counter
behind the glass, they give youthe money. The customer service agents at

(06:40):
the windows. Okay, those arethose are at the at the headquarters.
Are you Is it just volume?Are you able to because the volume,
it wouldn't matter. It's still apercentage of it. It's still the right.
Are they able to claim gambling lossesof that's it? That's it.
Thank you, thank you, thankyou, thank you. So yes,
so they'll say that they they they'veplayed the lottery so many times. I'm

(07:04):
so glad you said that. Theywrite off losses on their taxes that are
more than what they've lost on payingoff the tickets. So they said in
addition to in addition to the buyingbuying the tickets the winners. Yes,
they also will lurk outside the seveneleven and when anybody throws out a scratcher

(07:26):
that doesn't work, they dim outof the trash. So that's their quote
unquote proof. Right. So withthe irs goes, you're going to write
off that much? They go,look at the stack that I bought,
and that's how they write it offin that genius. Did you know that
you can write off lottery losses?Yeah? I did? You did?
Yeah, I know that, likeall your scratcher players and stuff know that.

(07:47):
Okay, now are you trying tofind a lucky coin in your pants?
What are you digging for? Ithink I think I cut my thigh
and it itches. Did you likejust shave? No, I have to
do that today before the wedding.Oh but yes, you better stop that
bleeding before you put on the whitelinen pants. Yeah. I don't know
what's going on there. I don'thave blood under my nails anyway. So

(08:13):
anyway, yes, so they takethe losses and they write those off,
and then they take their winnings,and the losses cover more than the winnings.
It's genius. These guys were showingup. They would even take pictures
at the lottery headquarters. Here weare winning again. They won twenty million

(08:35):
dollars and they said, some people, some people will make that deal with
them because of the taxes. Alsobecause of I'm gonna lose thirty percent at
lottery headquarters. I'll why not makenine hundred dollars? What do I care?
I don't know that that's illegal.By the way, well you said
this family got busted. They didfor fraud. But if somebody says to

(08:58):
me, Elliott, how much isthat ticket worth? And I'm like,
oh, I want a thousand dollarsand I'll pay you nine hundred dollars for
it and I give it to them. Is that illegal on a one off?
I'm not talking about running a racketon a one off. And you're
you're just a customer. I'm justa customer. I went into the seven
eleven bet, I bought the scratcherand that was it. You're circumventing tax

(09:22):
like you probably not. They're gonnaturn that in nailed on that I'm not
circumventing tax. Well I guess iam, because I'm getting claim lottery winnings
on your tax. Well, Iclaim losses, and you're not gonna say,
oh, yeah that Jafares gave menine hundred dollars. No, no,
but you wouldn't say anything, butyou're supposed to. Yeah. Man,
the person who has the ticket,who's getting the money from the lottery,

(09:43):
is gonna have to claim it.Ah, that that seems messy.
Now I understand that if I getan expensive clerks, you get in a
lot of trouble. Well, theclerks, by the way, are playing
middleman. So then I'm thinking ofmy two favorite guys at my two favorite
seven eleven right, awesome guys.Number one, do they know about it?
And number two is every is everyconvenience store slash gas station slash grocery

(10:13):
store does Is every one of themrunning a racket like this? Oh?
I thought you're gonna say, Arethey approached by people who try to do
this? Approached absolutely? Running aracket? No, because you you instantly
are like these clerks they worked with. Are they allowed to stell sell lottery

(10:35):
tickets anymore? There's no way lotterytakes the store. Lottery takes the stuff
very seriously. Oh, I don'tknow anything about the stores. I guarantee
you they are not part of thenetwork of lottery. Oh, I see,
I would think that I would thinkthat the employee gets fired, but
you can't. That's you take thatthat store offline. Okay, I didn't
know that the guy was doing it. I own five seven eleven. So

(10:56):
you think I know everybody. Youpointed the person to a way to avoid
implications from taxes. I didn't.My employee did, so I fired my
employee. Yeah, you're in trouble. I bet, I bet I could
get away with it a couple oftimes. Oh look, the Jaffars got
away with it for twenty million dollarsand then got busted. Dan they make

(11:20):
twenty million dollars. My first thoughtwas, why don't I do this just
But I'm not on as greedy ofa scale, like a smaller scale,
so they don't flag you. Right. These guys would go in, the
Jaffars would go into lottery headquarters withlike so many tickets that won. It
wasn't like they would show up once. They would go in with tickets and
go here you go. Yeah,and they'd be like, sweet, here's

(11:43):
fifty thousand dollars, here's one hundredthousand dollars Like that's crazy, Like that's
stupid. They talk about they didit for ten years. I am concerned
about how long they got away withit for. But that's a same You
got to be able to prove it. Here's a sign in sheet. You
guys are possibly doing something weird,but just write your name down. It's

(12:03):
it's odd. Got to be ableto prove it. It's it seems like
you'd be with all the surveillance camerasin the stores, surveill outside where'd you
buy the ticket? Seven eleven?Which one I don't remember? You just
said so much of this was happeningon site at these lottery agents. I
also now want to like walk theaisles at seven eleven going ten percent ten

(12:30):
percent. There's a guy who's youbetter make sure you understand all of it
before you do that. Well,I'm also well, and now I'm digging
through the trash trying to get thelottery I forgot that ex lottery losses on
your taxes and not have actual proof. I want elliot in the hallway and
someone says, oh wait, soI explained this part of it. Hold
Honestly, this page four of thenews story. Now like how long is

(12:54):
the story? Oh so I alsoput it out comments D L D R.
Isn't it great? Isn't that great? Well it makes for like a
movie, Yeah, but it's notgreat. Twenty million dollars. Can I
back up a step and tell youhow Ja'afar knew all the convenience stores.
Their backstory is actually pretty interesting,like when they were young, they were

(13:18):
from overseas and they fled Lebanon toSierra Leone and then Sierra Leone to the
United States and in order to likehonestly when you read about it, like
they really come from humble beginnings andhe was doing the dad, mister Jaffar
was doing everything he could to supportthe family, and so he was.

(13:41):
And this goes back to like whenphone cards were a big thing. He
started his own phone card business andwas selling them to all these convenience stores,
so they all knew Jafar, andthen Jaffar would Gramma go. They
also buy lottery women and that wasit. Stasan stopped, Oh did you
sell We didn't do lottery scratchers.Tony was afraid that we would never be

(14:03):
approved or was Tony taken offline?No, we never had him, but
we did sell a ton of prepaidphone cars exactly, probably to Jafar.
Oh my god. Yes. Andit started at race tracks where they would
have like like horse racing, Yeah, horse racing, but um gotty come

(14:26):
out work with me. The mafiawould be there and they would buy your
winning tickets and tell you give usthe ticket, we'll give you ten ten
percent. You're not saying no tothem, get out of here. And
they would and they would say,like, these these kind of things go
on. There's no like it's it'snot like these dirty dark back corners and

(14:48):
stuff. Now there's a guy.Oh that's what I was gonna say.
There's a guy who parks a verynice car in front of one of the
seven elevens I go to. Heis there more than me, Like I
get like, I get jealous,like he's spending more time with my guy
than I am. I wonder ifhe's a ten percenter. He's got a
very nice car. Oh you thinkJafar was driving around in a Jaffar JALAPPI

(15:09):
No, he looks really happy.He's probably driving a Jafar Jaguar from Beverly
Hills. Yeah. There you go, he's got one of his checks.
How many pictures did the lottery halfof them? While this investigation was ongoing,
and a hundred people in that officejust like, oh my god,
we know exactly who it is.Let's go, let's go. Oh.

(15:30):
They would say. When the daythat the whole bus went down, they
waited for him and the person calledhim was like, Jaffar's here, and
then they that's that's how they gothim. There's pictures of the he's got
two sons. The sons are it'sa family business, which is kind of
cool. It's cool to be acriminal. Yeah, But they're like they're

(15:52):
working together, they're spending time together. It looks like, and I'm not
sure why, but at some pointduring the scam, they enlisted friends to
redeem the winning tickets. You know, they say that that goes on sometimes,
so like ya to widen your circle. What what made them decide now

(16:12):
it's been too much, We've cashedin hundreds of tickets. No, Well,
you know what it was is theyprobably started feeling really uncomfortable being in
the lottery headquarters that often, andthey were like, somebody's gonna get suspicious.
But if we send Diane in.Now we've got a new one that
we could send in every so often. I would do that too, Yeah,

(16:33):
they definitely. You don't think,you know, if I was running
that scam out of here, youdon't think I'd send Josh down the road
to go claim a couple of them, and I give them fifty one hundred
bucks just to go drive there,get the money and bring it back.
Josh would do that all day.They were giving the clerks fifty to one
hundred and fifty to one hundred bucksticket. Yeah, right, and you
would give Josh fifty to one hundredfor as a runner going to the mule
headquarters. Yeah, joshould do it. Josh. You would do that for

(16:56):
one hundred bucks. Yeah, joshoulddo it for five Josh would do it
if I just set his name onthe air. Where am I going here?
Fine? Six? Thank you?Hi Elliot in the morning. Oh
is this me? Yeah? Hi? Who's this? It's Kim? Hey

(17:17):
Tim? What can I do foryou? A lot of these places are
family owned, and they're usually foreign, and they keep stuff tight. Well,
I mean, I don't know,I don't know that ethnicity has any
I mean, I'm not going toargue with you. Yes, a lot

(17:37):
of them are foreign. Oh butI don't know. I don't know that
ethnicity has to do anything with it. They're usually family owned and they have
the families work in there. Right, that is true. That is true,
and so they keep everything tight.They know what they're doing. It's
not like, uh, you know, you hire a fifteen year old or

(17:59):
yeah, right, you're not worriedabout loose lips. Right, No,
you got the You're you're running thefamily business. Listen. I was in
my seven eleven over the weekend.The guy was watching the cricket Championships.
I felt bad that I was interruptinghim. That says in many cases,
the thank you sir, a conveniencestore owner or the clerk would actually call
the Jaffar's and they'd show up.They'd drive there immediately. Oh yeah,

(18:19):
No, if you knew that youhad a big winner on the line,
you would tell the guy, holdon one second, I may be able
to help you here. Hey,Jafar got one. And then Jaffar would
come over and and by the way, Jaffar would be very friendly. He's
not there like, hey, I'mgonna break your ankles. Like there was
none of that. It would bevery friendly. Oh but I would sell

(18:40):
my ticket all day. So here'ssome red flags to look out for when
you start your little scam. OhElliott walking through the seven eleven, just
mumbling ten percenter, ten percenter,with the novels worth the computer paper?
No, no, no, no, throw that out. Don't throw that
out. I need for my losses. Oh there's coffee on Oh for the

(19:02):
how to do it? Oh forthe instruction manual. No, it said
when the IRS started sniffing them out, undercover agents would go in and win
and then sell their tickets to clerksand the ja'fars. Because at that point,
what do I say to the judge? Entrapman? Bingo? Bingo?

(19:25):
I had never done this before.They lured me into thinking this was a
good idea. I feel like theyhad quite the case already established. Prove
it. That's on the state righthere. It's actually it's smaller than how
many papers you've printed out. Butit's in my hands as well. Line
too. Hi Elliet of the morning, Hi, good morning. Hey,

(19:48):
who's this? This is Greg?How are you? Hey? Greg?
I'm doing great? What can Ido for you? Sir? So I've
used tim percenter report at the racetrack, and once you get up to a
certain amount, like I think it'sten grand I can't remember as well,
a long time ago, but Iwon thirteen thousand and the ten percenter.

(20:12):
Instead of taking ten percent, hetook half of the gift holdings, So
knowing they're going to hold back twentypercent or whatever thirty percent, so when
he casted the tickets, he kepthalf, or he gave me the money
I would have won and half ofthe hip holdings. Do you understand what

(20:33):
I'm trying to say? I do? I understand that. Yeah. So,
and that's how they do it whenyou get large amounts. And I
also got lucky and hit the cashfive and one one hundred thousand dollars.
Yea. So the lottery, thelottery takes. I got seventy one thousand
out of one hundred, so theytook twenty nine thousand, right, And

(20:53):
you're talking about keeping losing, you'retalking about keeping losing tickets, so you
keep they're losing lottery tickets, andlike these ten percenters. That was also
the track a lot So if you'relike the racetrack, you keep all these
losing tickets plus the program for thatnight to prove that you were there that

(21:15):
night. You have a program,you have losing tickets. Same with the
lottery. You just keep your losinglottery tickets into the year when the taxman
does your taxes. Like I say, they took twenty nine thousand, I've
got twenty six thousand of them backin taxes with losing tickets. Got a
boy, Got a boy? Goodfor you? So you know that it

(21:36):
like it cost you three thousand dollars, So that's up. So that's how
those ten per centers do it.They they just keep all these losing tickets
and at the end of the year, their taxmen are probably a little bit
more shady than mine was, andthey just they get all that money back
that they're giving you for your tenpercent. Do people who win thank you,
sir? Does everybody that wins likefifty one hundred thousan dollars are they

(22:00):
approached by a ten percenter? Idon't know if it's known that you've just
scratched off those types of winnings.Can I ask you this? Probably if
I although there probably wouldn't be enoughto recover the loss, I was gonna
say, if I want what's Powerballworth? And they're both in the hundreds

(22:21):
right now. If I won onehundred million dollars and a ten percenter was
like, I'll give you nine hundredmillion dollars, nine hundred thousand dollars whatever
number. No, because that wouldyou know what I mean. But they
would have to have so much tocover the loss and taxes that that's too
much money. Also, power Balland Mega millions are a beast unt to
themselves. They review footage of thatticket getting purchased wherever they get it purchased.

(22:45):
No, no, no, butoh that winning can claim it.
And I understand their can. That'swhy I wear a full body suit and
you always say, oh, aLLC then goes and gets it. I
think you'd have trouble with the thatcould be. But if they go in
and verify, then that could be. Here's the thing, though, can't
verify my scratcher. When you andyour son with sons, I guess it
was get busted, the three ofthem. I hope one of your sons

(23:08):
doesn't say to the judge that they'rehappy that this ordeal is over and a
dark cloud has floated away. Thiswas a gross and disturbing crime we were
a part of, and I'm justrelieved that it's all done with. Oh
you know what, you had mademe do it, pussy, we won
twenty million dollars crime a River.Tax violations have been erroneously referred to as

(23:34):
victimless crimes. True, but it'sthe honest, law abiding citizen who is
harmed when someone tries to manipulate ournation's tax system. Uh. The Jaffars
were breaking the law in the rulesof the lottery by working with dozens of
convenience stores. That's fine, everyonegot cash under the table. In twenty

(23:56):
nineteen, the Jaffars claim more thanthree point two million dollars in winnings.
Joseph ja'far was the sixth highest ticketcasher in the entire state that year.
His brother was third, and hisdad was first. Jesus, I love

(24:18):
it. They were referred to asfor a while as the luckiest men in
Massachusetts, and the Massachusetts State LotteryCommission is now in the process of revoking
the licenses of forty lottery agents.Oh booooo, no, come on,
more entrapman.