LYNN, MASS. (WHDH) - An 80-year-old Lynn man pleaded guilty to running a multi-million dollar lottery scheme known as “10 percenting”
Clarance Jones, pleaded guilty in federal court Monday to conspiring to commit tax fraud and filing false tax returns, according to a release issued by U.S. District Attorney Andrew E. Lelling.
From 2013 to 2015, Jones worked with two store owners, George Kinslieh, 68, and Bhavna Patel, 44, to buy back winning lottery tickets at a discounted price to allow the ticket holders to avoid reporting the winnings on their tax returns.
Jones would then take the winning tickets to the Massachusetts State Lottery Commission as his own, and collected the full winnings.
Jones, who claimed to be a professional gambler, then listed the winnings on his tax returns but would offset them with other gambling losses, according to Lelling.
The three would then divvy up the winnings.
Between 2011 and 2017 Jones allegedly paid less than $16,000 in federal tax on a total of approximately $52,000 of reported income.
Neither Patel nor Kinslieh reported any income that they received from the ticket scheme to the Internal Revenue Service.
They are due to be sentenced at a later date.
The charge of conspiracy to commit tax fraud provides for a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000 or twice the gross loss or gain, whichever is greater. The charge of filing a false tax return provides for a sentence of no greater than three years in prison, one year of supervised release, a fine of $100,000.
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