Another fraud ring is caught
By Kate Northrop
On Tuesday, Massachusetts Attorney General Maura Healey announced that twelve individuals and three stores in the state were indicted in connection with an ongoing scheme to launder lottery winnings and thus avoid paying taxes.
The Massachusetts State Lottery Commission (MSLC), in conjunction with State Police, discovered that twelve individuals conspired to evade taxes in a calculated scheme to defraud the state of taxes on lottery winnings and other debts.
All twelve individuals were indicted on Friday by a Statewide Grand Jury on charges including conspiracy to evade taxes, attempting to impede or obstruct state tax laws, money laundering, and providing false statements under penalty of perjury. The Massachusetts Lottery also noted that the defendants lied under oath on numerous lottery claim forms. The individuals range from ages 29 to 80.
"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," Treasurer and Chair of the MSLC Deborah B. Goldberg said in a press release. "I am thankful for the Lottery team, the Attorney General's Office, and the Massachusetts State Police for their diligent and effective work on this case."
Three of the defendants were also employees at three different stores: the Grab N Go on Washington Avenue in Chelsea, Robinson's News Convenience Store on Eastern Avenue in Malden, and Richland Convenience Store on Nahant Road in Nahant.
The stores facing charges are Underground Express on Winter Place in Boston, Richdale on Lowell Road in North Reading, and NT Lucky Variety on Arlington Street in Chelsea. Currently, the Lottery is working to suspend the licenses of those stores and removing all Lottery equipment from the locations, but may permanently revoke the licenses after a full review process is completed.
"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," Lottery Executive Director Michael Sweeney stated. "We are grateful for the initiative taken by the Attorney General's Office and the Massachusetts State Police to confront this activity and assist us in securing the public's trust in the Lottery."
Over the last three years, a collaboration between the Lottery and law enforcement has resulted in the federal indictments of six other offenders related to a high frequency of cashing in lottery tickets. According to the Lottery, four of these individuals were historically the most frequent participants in this type of activity in Massachusetts.
In August, a father and son duo from Massachusetts was accused of defrauding the lottery in a long-running tax evasion scheme and was charged with over a dozen counts of fraud, money laundering, and tax evasion.
It was a mindboggling case in which they managed to fraudulently claim in 13,000 winning tickets worth $21 million over eight years, a statistically improbable, if not impossible, situation that could not be attributed to sheer luck.
It was the same type of scheme that the twelve defendants are accused of, commonly called "ten-percenting." Scammers will buy winning lottery tickets from players for cash at a discount between 10-20% of the ticket's value. As a result, players who originally held the tickets would not have to report the winnings on their tax returns or pay owed child support. The fraudsters then present the winning tickets to the Lottery as their own, claim the prize for themselves, and report the winnings on their tax returns such that they would be offset by alleged gambling losses, thus avoiding federal income taxes.
In this instance, the defendants funneled the winning tickets to individuals Frank Obey, 80, of Lynn, and Kenneth Grossman, 69, of Revere, and their runners. They were the ones who presented false claims forms to the Lottery and claimed that the winnings were their own.
Two of the actual lottery winners, Peter Marano and Adam Derebala, were also charged for tax evasion and failing to file a tax return.
The Lottery is required to cross reference the identity of claimants with information provided by the Department of Revenue before paying out prizes of $600 or more to determine whether the winner owes child support or past-due tax liability.
Since 1994, the Lottery states, over $26.2 million has been withheld from Lottery prize winnings and returned to the Commonwealth.
The Attorney General's Office alleges that the scheme ran from April 2020 through May 2021. Those indicted on Friday will be arraigned in Suffolk Superior Court at a later date, the Office said.
Instead of trying to evade the payments that will come out of your payment (maybe all of it) just pay it and get that monkey off ur back
Corruption in Massachusetts?
This is unheard of!
They need someone like Mayor Beetlejuice in Chicago to straighten this out!
Once, I had a cashier steal a winning $500 ticket from me. I called the lottery, I got a check for the money, and that store never sold another lottery ticket ever again. The lottery handled her arrest.
I had that happen in Virginia years ago. I handed the broad 4 or 5 tickets when I walked in and then I ambulated over to get a 12 pack and when I came back she handed me the money and it was a hundred bucks short. The lottery gave me the money later but I don't know if anything happened to the clerk. The store is still selling tickets though but not to me.
Always sign your tickets and hand them over to them one at a time and don't take your eyes off of them wimmins running them through the machine. No matter what kind of googly eyes they make at you. There's a lotta wimmins out there that are desperados. Fact I been married to a few of 'em. Mean, vicious wimmins. I'm here to testify.
I commend Maura Healey in wanting to combat criminal activity. It is very important to have transparency in all things.
Now get that 2020 election FULL FORENSIC audit going miss stop criminal activity person!!!
Before Brandon Launders all of the U.S. TAX payer money to China!!
And Besides Taxing Lottery Winning is a Criminal Activity in of itself!!!
Instead of Lottery Tax, there should be a mandatory Charity Giving tax of ANY amount decided upon by the winner.
I am giving all my Charity to Hunter, he is low on his hookers and cocaine these days now that his father has shut down the border stonger than an alligators jaw down in Bayou country.