Monday, August 23, 2021

Family that previously sued when the state tried to stop paying their suspicious lottery winnings was just indicted for tax fraud

From 2019:

[He] his two sons have combined to cash $5.8 million in lottery tickets in 2019 — mostly on tickets worth just $2,000 — a WBUR data analysis has found.

Every year since 2014, [he] has been the winningest person playing the Massachusetts State Lottery.

But payouts to most [of his] family members have now been temporarily halted under a state policy, introduced in late July 2018, that sought to crack down on people who win with a frequency the lottery views as "factually or statistically improbable."

So far, though, the agency has only targeted the five most profitable of dozens of so-called “frequent cashers,” and [he and his family] are now suing the lottery, challenging whether the state has the authority to withhold the family’s prize claims. Their lawsuit marks the first legal battle over the policy.

...

[Another man targeted by the state] didn’t say he possessed odds-defying luck.

Instead, he offered another explanation. He told the lottery his line of work is akin to being a shepherd for the lottery, saying he spends nearly every day cashing tickets for winners who do not want to go get the prizes themselves. In return, he gets a cut. It’s a scheme that in the past has been called “10% cashing.”
A federal grand jury last week indicted a Watertown man and his two sons for an alleged scheme in which they managed to evade hundreds of thousands of dollars in taxes on the $21 million in winning state lottery tickets they cashed in between 2011 and 2020.

In the indictment, a grand jury alleged that [the man and his sons] did not actually become the winningest Lottery players in history by getting lucky - [he] allegedly cashed in more than 10,000 winning tickets during that period- but through a "10 percent" scheme, in which they would buy winning tickets, cash them in under their names and then keep 10 to 20% of the winnings.

At the same time, the indictment charges, the three claimed massive lottery losses, which let them reduce the amount of profits they had to report on federal taxes