This flood of sales triggered a premature roll-down. Acting United States Attorney Nathaniel R. Mendell and Ramsey E. Covington, Acting Special Agent in Charge of the Internal Revenue Services Criminal Investigations in Boston made the announcement. William McNamara, 67, of Revere, is facing one count each of false statement under penalty of perjury, conspiracy to evade taxes, attempting to impede/obstruct administration of state 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." Both are alleged to have circumvented the legal ticket-claiming process.The "ten-percenting" scheme is designed to defeat government collection of back taxes through the Department of Revenue Intercept Program, which is an automated process used to intercept and collect Massachusetts State Lottery Commission winning payouts over $600 to satisfy delinquent debt. Problem Gambling Helpline: 1-800-327-5050 www.gamblinghelplinema.org And if no smiling faces and giant checks appear in the newspapers for a while, people might stop playing. EYTH PURCHASED WINNING TICKETS FR AOMCTUAL WINNERS AT A DISCOUNTED VALUE. 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. Thank you for your website feedback! Players would choose six numbers for each two-dollar ticket. In May 2020, prosecutors say Lamb won $10,000 on a Massachusetts State Lottery Commission scratch ticket, which he then sold to a convenience store owner for $7,500 in cash. See the winning numbers from the draw, including which Power Play was selected, right here. Selbeestarted on his own in 2003, spending a few thousand dollars a week, while keeping the whole thing a secret from his more risk-averse wife. He has been identified as an employee of the Richland Convenience Store located at 332 Nahant Road in Nahant.Ghanshyam Patel, 45, of Malden, is facing one count of conspiracy to evade taxes. Massachusetts Lottery Games and Drawing Schedules Mega Millions Mega Millions is a multi-state lottery game enjoyed all over the US. As well as waiting for an appropriate jackpot sizeone close to but below $1.6 millionthe MIT group had to fill out around 700,000 betting slips, all by hand. Results: Mega Millions, Powerball, Megabucks Doubler, Lucky for Life, Mass Cash, Numbers Game. 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. In November 2022, the Massachusetts Lottery sold about $58.6 million in Powerball tickets, reflecting $48.9 million more than November 2021, or a roughly sixfold increase. The dodge allows lottery winners to avoid state and federal taxes, child support and other financial obligations. Defendants were states top individual lottery ticket cashers as result of alleged fraud, claiming more than $20 million in Massachusetts lottery winnings. "They used to refer to the old lottery headquarters in Braintree as my office," he said. Must be 18 years or older to play the Lottery. So that's what the Selbees started doing, to the point that playing the lottery became a full-time job at times. 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. Another group was led by Gerald Selbee, a retired shop owner and former math student who had previously had success with a similar game elsewhere. It didn't matter, as the Selbees would later argue, that theirout-of-state money was pumping millions of dollars into the Massachusetts lottery's coffers--and was ultimately distributed to the state's cities, towns, and schools. Kathyann Pellegrini won a $2 million prize on Oct. 18 after playing the "$2,000,000 50X Cashword" instant. Gov. All the defendants will be arraigned in Suffolk District Court at a later date. Karl Voelker, 67, of Boston, is facing one count of conspiracy to evade taxes. Massachusetts Mega Millions MA Mega Millions Hub Archive Next Mega Millions Draw Tomorrow, Feb 28, 2023 Est. Since selling our first ticket in March of 1972, the Lottery has returned more than $31 billion in net profit to the Commonwealth. Play a dollar here and there, and you might win occasionally. In the summer of 2011, Gregory Sullivan, Massachusettss Inspector General, compiled a detailed report on the matter. Adam Derebala, 29, of Revere, was charged with failure to file a tax return. Prizes range from $500 to $15 million. There was also the question of how to store and organize all the tickets they bought. Why are supply rates going down for gas but not electricity? Read More: Where Are Jerry and Marge Selbee Now? The latest Massachusetts Powerball drawing took place on Saturday, February 25, 2023, offering a jackpot worth $120.9 Million. (Shutterstock) WOBURN, MA The Massachusetts State Lottery's North Shore regional . She also worked in product management at The Atlantic. 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 All were charged with conspiracy to evade taxes and may have their licenses revoked after a full review is completed. 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. More people were buying tickets in roll-down weeks, so the prizes were split into smaller and smaller chunks. P.O. MIT students scammed Massachusetts State Lottery for $8 million: report, Lottery officials knew about Cash WinFalls flaws, IG says, When Good Things Happen to Good People: 8 Heartwarming Lottery Wins, Traffic App by MIT and Princeton Could Change Driving Forever, 13-Year-Old Girl Finds Porn On New Cell Phone, These Are North Koreas 28 State-Approved Hairstyles, Mountain Dews Dub the Dew Online Poll Goes Horribly Wrong. Marge Selbee, Jerrys wife, accompanies him in the new endeavor. In such a competitive environment, it was crucial to obtain an edge over other teams. The details contained in the charging document are allegations. A lock icon ( 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. Prior to starting at The Herald, she was a reporter at The Lowell Sun, and previously reported for STAT News, The Boston Guardian, Native News Online, FierceBiotech and other publications. Despite the ongoing competition, some betting syndicates have managed to repeatedlyand legallyturn a profit. Miller's latest win matched a February 18 drawing, which he claimed at the Massachusetts Lottery headquarters this month. 2023 TIME USA, LLC. In 2018, the Lottery instituted a formal policy to address high-frequency prize winners and the factual or statistical improbability of their prize claims, according to a spokesperson from its office. They calculated that a player who used stores automated lottery machines, which churned out tickets with arbitrary numbers, would be able to place 100 bets per minute. 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. Within a year, The Boston Globe had published a story about the loophole in WinFall and the betting syndicates that had profited from it. There were prizes for every five, four, three, or two same numbers. Home | Massachusetts Lottery Supporting Communities MSLC meeting, Tuesday February 28. The Massachusetts Lottery sold its first ticket on April 6th, 1972, with seven people winning $50,000 each in "the Game" drawing. The Season Ticket option offers you two possible subscriptions: 3 months, or 6 months. Muhammad Khan, 52, of Medford, is facing one count of conspiracy to evade taxes. "Oh, I knew it would work," Marge said later, given her husband's propensity for code-breaking and math. Jerry found a loophole in the system using his arithmetic skills and cashed in thousands. 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. It stars Bryan Cranston and Annette Bening and is . Would you? The defendants 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.. This Couple Found a Math Error in the Lottery and Made $27 Million (Playing Over and Over for 55 Weeks), the Stanford PhD who reportedly gamed the Texas lottery. A Massachusetts woman who accidentally tossed out a $1 million lottery ticket eventually collected her winnings thanks to the kindness and honesty of the owners of the convenience store where. 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. with approximately 98 percent of funds generated go directly back into the economy through prizes (73 percent),. Still, he seemed to think, it was a small price to pay--and well worth the cost. Six people have been federally indicted since 2018 for illegal activities tipped off by the high frequency cashing of lottery tickets.. (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 (. Even within a university as famously offbeat as the Massachusetts Institute of Technology, Random Hall has a reputation for being a little quirky. Meet Marge and Jerry Selbee,owners of a "party store" in Evart, Michigan that sold cigarettes, liquor, and lottery tickets. In 2010, Malone ran for the Republican nomination for Congress in Massachusetts's 10th congressional district. 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Massachusetts State Lottery. After watching thousands of customers, Jerry figured out how to hackthe odds in a certaintype of lottery: called Winfall in Michigan, and later Cash WinFall in Massachusetts. Simple brute force approaches do not require many calculations to pull off. In June 2011, The Boston Globe published a feature regarding the flaw in the system of Cash WinFall and how two groups have taken advantage of the same to acquire profits. The attorney general's office said three businesses -- Underground Express on Winter Place in Boston, Richdale on Lowell Road in North Reading, and NT Lucky Variety on Arlington Street in Chelsea -- that sold Lottery products also face charges of conspiracy to evade taxes. Lottery officials announced the Powerball drawing will expand to three nights a week, Copyright 2023 NBCUniversal Media, LLC. When the estimated jackpot reached $2 million, players knew that the money would roll-down if nobody matched six numbers. 12 people, 3 stores in Greater Boston area indicted in perjury, tax avoidance lottery scheme, THE CDC FINAL APPVARO BEN: 12 PEOPLE INDICTED IN CONNECTION WITH AN ONGOING SCHE TMEO ROB THE STATE BY LAUNDERING MODERATE WINNINGS. According to the AG's office, store owners and employees funneled winning tickets to Obey, Grossman and their runners. stakes were higher. In 2005, another plan started to take shape in the corridors of Random Hall. (MORE: When Good Things Happen to Good People: 8 Heartwarming Lottery Wins). 1998 - 2023 Nexstar Media Inc. | All Rights Reserved. A Winfall ticket cost $1. But in the end, it was the Boston Globe newspaper that brought the whole thing crashing down. All of these charges are allegations, and the defendants are presumed innocent until proven guilty. Like big bettors at the racetrack or in Las Vegas, each big group started to interfere with the other's strategy. 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. One is called Destiny, a result of its cash-strapped inhabitants selling the naming rights on eBay; the winning bid was $36 from a man who wanted to name it after his daughter. Please do not include personal or contact information. He wanted to get hold of a copy of the guidelines for the game, which would outline precisely how the prize money was distributed. Decisions about whether to revoke the licenses would be made after a more complete review, Lottery officials said. The scheme allows the true winners to avoid financial obligations, including state and federal taxes. Between April 2020 through May 2021, the defendants bought winning lottery tickets from the true winners for cash at a discount, prosecutors allege. They come in multiple price points: $1, $2, $5, $10, $20 and even $30. Spillane has been to the Massachusetts Lottery headquarters 41 times to claim a winning ticket. If they matched some but not all the numbers, they won a smaller sum. Twelve indicted in statewide lottery laundering, Click to share on Facebook (Opens in new window), Click to share on Twitter (Opens in new window), Click to share on Reddit (Opens in new window), Substantial snowfall likely for parts of Massachusetts, as meteorologists track wintry mix, Twelve indicted in statewide lottery laundering scheme, Prosecution wraps its case at Alex Murdaugh murder trial, Death toll keeps rising in Greeces deadliest train crash, Cops say man sprayed MBTA passenger with unknown liquid, Passenger in 2021 Green Line collision sues MBTA for $44K. The alleged tactic, called ten-percenting, happens when one person claims winning tickets and keeps a percentage of the prize, as high as 10% to 20%, as fee from the true winner, according to the AGs office. Then, Michigan closed down the game they were playing, and they focused on Massachusetts, where thestakes were higher. 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. 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. From 2005 to 2011, Jerry and Marge would monitor the jackpot from Michigan and when the roll-down was about to happen, they made the 14-hour drive from their home to Massachusetts to buy . Whereas clever roulette players have only to outwit the casino, lottery syndicates often have to compete with other teams attempting to win the same jackpot. I am thankful for the Lottery team, the Attorney Generals Office, and the Massachusetts State Police for their diligent and effective work on this case.. State lotteries represent an unethical capitulation of governments to laziness, cowardice and greed, as they choose emulate casinos to entice the poor, desperate and stupid to give away their money rather than do their duty and make hard political choices about taxes. It came the following week, on August 16. The Massachusetts State Lottery aided in this investigation, by working with investigators in the AGs Office to identify claims of the alleged perpetrators of this scheme. The math is explained at greater length in a recent, 10,000-wordarticle on The Huffington Post (which I highly recommend). The AGs Office alleges that from April 2020 through May 2021, the defendants, 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. The math whizzes quickly discovered that buying about $100,000 in Cash WinFall tickets on those days would virtually guarantee success. Please remove any contact information or personal data from your feedback. The inspector general concluded that because lottery officials received no personal benefit from the syndicates manipulations of the game, no further action was necessary. By 2010, he and a fellow team member incorporated the business. This also required a 12-hour drive each way to play--standing in convenience stores, for days at a time. When Selbees syndicate heard about WinFall, they turned their attention to Massachusetts. Soon, he began to reap profits. Receive the latest news and breaking updates, straight from our newsroom to your inbox. Ali Jaafar, 62, and Yousef Jaafar, 28, both of Watertown, and Mohamed Jaafar, 30, of Watertown and Waltham, and were each indicted on one count of conspiracy to defraud the Internal Revenue Service, one count of conspiracy to commit money laundering and multiple counts of filing false tax returns. When that happened, Jerry and Marge started going to Massachusetts to play Cash WinFall, a similar game run by the Massachusetts Lottery. He has been identified as an employee of Robinson's News Convenience Store located at 1556 Eastern Avenue in Malden.Muhammad Khan, 52, of Medford, is facing one count of conspiracy to evade taxes. Pushing the draw over the limit on August 16 had been the result of extensive planning. When WinFall was introduced, lottery officials had looked into the possibility of somebody deliberately nudging the draw into a roll-down by buying up a large number of tickets. Cash WinFall wasnt drastically different from Winfall. It took us about a year to ramp up to it, Harvey later said. (Update: If you thought this story was something, check outthe Stanford PhD who reportedly gamed the Texas lottery and walked away with $20 million.). 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 roll-down happened when the jackpot money hit $2 million. The MIT group did this by understanding the game better than many of their competitors: They knew the probabilities and the payoffs and exactly how much advantage they held. He is an attorney that specializes in estate planning. Mohamed Jaafar was the third highest individual ticket casher and Yousef Jaafar was the fourth highest individual ticket casher. Both are alleged to have circumvented the legal ticket-claiming process. Ten-percenting is a practice that the Lottery and law enforcement officials have been aware of and trying to address for decades. Thrilling Prizes Mega Millions Drawing on Feb 24, 11:00 pm Est Jackpot Est Cash: $63.9 million Powerball Drawing on Feb 22, 10:59 pm Est Jackpot Est Cash: $51.3 million Megabucks Doubler Drawing on Feb 22, 9:00 pm Est Jackpot Est Cash: $2.71 million The "ten-percenting" scheme is designed to defeat government collection of back taxes through the Department of Revenue Intercept Program, which is an automated process used to intercept and collect Massachusetts State Lottery Commission winning payouts over $600 to satisfy delinquent debt. Watch McMillion$ for Free Start from the beginning and watch the first episode of McMillion$ for free. The new movie "Jerry and Marge Go Large" tells the true story of a Michigan couple who used a lottery loophole to win millions of dollars.. 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