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Tuesday, October 26, 2021

TWELVE INDIVIDUALS AND THREE STORES IN CHELSEA, BOSTON, AND NORTH READING INDICTED IN CONNECTION WITH PERJURY AND

TWELVE INDIVIDUALS AND THREE STORES IN CHELSEA, BOSTON, AND NORTH READING INDICTED IN CONNECTION WITH PERJURY AND

TAX-AVOIDANCE LOTTERY SCHEME

BOSTON Twelve individuals and three stores in Boston, North Reading and Chelsea have been indicted in connection with an ongoing scheme to rob the state of tax revenue by laundering lottery winnings and lying under oath on numerous lottery claim forms, Attorney General Maura Healey announced today.

The charges are the result of an investigation by State Police assigned to the AG’s Office, State Police assigned to the State Treasurer’s Office of Investigations, the State Police Gaming Enforcement Division, and the Massachusetts State Lottery Commission (MSLC) into a calculated scheme carried out by the defendants to defraud the state of taxes on lottery winnings and other debts owed to the Commonwealth.

The 12 defendants were indicted Friday by a Statewide Grand Jury on the following charges:

Frank Obey, age 80, of Lynn

False Statement Under Penalty of Perjury (2 counts)

Conspiracy to Evade Taxes

Attempting to Impede/Obstruct Administration of Massachusetts Tax Laws

Money Laundering

Kenneth Grossman, age 69, of Revere

Conspiracy to Evade Taxes

Attempting to Impede/Obstruct Administration of Massachusetts Tax Laws

Money Laundering

William McNamara, age 67, of Revere

False Statement Under Penalty of Perjury

Conspiracy to Evade Taxes

Attempting to Impede/Obstruct Administration of Massachusetts Tax Laws

Money Laundering

John Heller, age 73, of Revere

Conspiracy to Evade Taxes

Adam Derebala, age 29, of Revere

Failure to File a Tax Return

Peter Marano, age 52, of Boston

Tax Evasion

Karl Voelker, age 67, of Boston

Conspiracy to Evade Taxes

Paritosh Patel, age 48, of Reading

Conspiracy to Evade Taxes 

Nelson Tejada, age 43, of Chelsea

Conspiracy to Evade Taxes

MDGolam Talukder-Manik, age 57, of Lynn

(Employee of Richland Convenience Store located at 332 Nahant Road in Nahant)

Conspiracy to Evade Taxes

Ghanshyam Patel, age 45, of Malden

(Employee of Robinson’s News Convenience Store located at 1556 Eastern Avenue in Malden)

Conspiracy to Evade Taxes

Muhammad Khan, age 52, of Medford

(Employee of Grab N Go located at 367 Washington Ave in Chelsea)

Conspiracy to Evade Taxes

Underground Express, 31 Winter Place in Boston

Conspiracy to Evade Taxes

Richdale, 4 Lowell Road in North Reading

Conspiracy to Evade Taxes

NT Lucky Variety, 137 Arlington Street in Chelsea

Conspiracy to Evade Taxes

            The defendants will be arraigned in Suffolk Superior Court at a later date.                                      

            The AG’s 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. This scheme, commonly known as “ten-percenting,” is a practice where individuals claim winning lottery tickets and retain a percentage of the winnings, sometimes as high as 10 or 20 percent of the proceeds as fee from the true winner. This arrangement allows the true winners to avoid financial obligations, including state and federal taxes. Store owners and employees funneled winning tickets to Frank Obey, Kenneth Grossman and their runners. 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. Two true winners, Peter Marano and Adam Derebala, were identified and stand charged respectively for tax evasion and failing to file a tax return. 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 (DOR) Intercept Program. The DOR program is an automated process used to intercept and collect Massachusetts State Lottery Commission winning payouts, over $600, to satisfy delinquent debt. Massachusetts law prohibits the unlawful assignment of winning lottery tickets.

            This investigation also identified Frank Obey, Kenneth Grossman and William McNamara as individuals who were using the Massachusetts State Lottery to launder money.

The Massachusetts State Lottery aided in this investigation, by working with investigators in the AG’s Office to identify claims of the alleged perpetrators of this scheme. The MSLC’s Compliance and Internal Audit Department focuses on the prevention, detection, and the investigation of those who defraud or attempt to defraud the lawful ticket-claiming process.

All of these charges are allegations, and the defendants are presumed innocent until proven guilty.

       AG Healey’s Gaming Enforcement Division has a dedicated group of prosecutors and investigators who enforce the state’s Expanded Gaming Act of 2011 and investigate and prosecute illegal activity such as gaming-related financial crime, organized crime, corruption and money laundering, including the majority of criminal activity occurring at the state’s casinos.

The case is being prosecuted by Assistant Attorneys General Emil A. Ata and Kevin P. McCarthy, both of AG Healey’s Gaming Enforcement Division with the assistance of the AG’s Digital Evidence Lab, including Forensic Digital Media Analyst Paul Melaragni and Digital Evidence Analyst Jobal Thomas. Financial investigation was conducted by Senior Financial Investigator James O’Hara of AG Healey’s Gaming Enforcement Division, as well as Financial Investigator James Donahue of the DOR Criminal Investigations Bureau.

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