Crime

12 people were indicted in a Mass. lottery ticket-cashing scheme. Here’s how the alleged con works.

The scheme involved a practice known as "10 percenting," officials allege.

Dina Rudick/Globe Staff/File

A grand jury has indicted a dozen people and three stores in Boston, North Reading, and Chelsea in connection with a scheme to launder money and avoid taxes on lottery winnings.

State Attorney General Maura Healey’s office said the con, allegedly perpetrated by store owners and clerks along with two Massachusetts State Lottery winners, involved laundering lottery winnings and “lying under oath on numerous lottery claim forms.”

The charges resulted from an investigation by Massachusetts State Police assigned to Healey’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, prosecutors said.

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“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,” Michael Sweeney, executive director of the Massachusetts State Lottery, said in a statement.

According to Healey’s office, the scheme involved a practice known as “10 percenting,” a term for when individuals claim winning lottery tickets and keep a portion of the prize — sometimes as much as 10 or 20 percent — as a fee from the true lottery winner.

“This arrangement allows the true winners to avoid financial obligations, including state and federal taxes,” officials said.

The move is “designed to defeat government collection of back taxes through the Department of Revenue Intercept Program,” which automatically collects for lottery payouts totaling over $600, Healey’s office said.

Between April 2020 through May 2021, the defendants bought winning lottery tickets from the true winners for cash at a discount, prosecutors allege.

“Store owners and employees funneled winning tickets to Frank Obey, Kenneth Grossman and their runners,” officials said. “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.”

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The two actual winners, Peter Marano and Adam Derebala, were charged with tax evasion and failing to file a tax return, respectively.

Obey, Grossman, and William McNamara allegedly used the lottery to launder money, prosecutors said.

“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,” state Treasurer Deborah B. Goldberg, chair of the Massachusetts State Lottery Commission, said in a statement. “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.”

According to lottery officials, the Lottery is in the process of suspending the licenses of the three stores involved, which are Underground Express, at 31 Winter Place in Boston; Richdale, at 4 Lowell Road in North Reading; and NT Lucky Variety, at 137 Arlington St. in Chelsea. All were charged with conspiracy to evade taxes and may have their licenses revoked after a full review is completed.

Here are the 12 individuals charged, according to Healey’s office:

Frank Obey, 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, 69, of Revere

  • Conspiracy to Evade Taxes
  • Attempting to Impede/Obstruct Administration of Massachusetts Tax Laws
  • Money Laundering

William McNamara, 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, 73, of Revere

  • Conspiracy to Evade Taxes

Adam Derebala, 29, of Revere

  • Failure to File a Tax Return

Peter Marano, 52, of Boston

  • Tax Evasion

Karl Voelker, 67, of Boston

  • Conspiracy to Evade Taxes

Paritosh Patel, 48, of Reading

  • Conspiracy to Evade Taxes

Nelson Tejada, 43, of Chelsea

  • Conspiracy to Evade Taxes

MDGolam Talukder-Manik, 57, of Lynn

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

  • Conspiracy to Evade Taxes

Ghanshyam Patel, 45, of Malden

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

  • Conspiracy to Evade Taxes

Muhammad Khan, 52, of Medford

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

  • Conspiracy to Evade Taxes
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