Peabody Woman Sentenced for Multi-Million Dollar Lottery Ticket Scam

BOSTON - A Peabody woman was sentenced today in federal court in Boston in connection with a “ten-percenting” scheme, in which she purchased millions of dollars’ worth of winning Massachusetts state lottery tickets at a discount in order to help the ticket holders avoid taxes on the winnings.

Bhavna Patel, 44, was sentenced by U.S. Senior District Court Judge Douglas P. Woodlock to one year of probation and ordered to pay a fine of $1,000. In September 2018, Patel agreed to plead guilty to one count of conspiracy.  

Two co-conspirators previously pleaded guilty. George Kinslieh, 68, was charged with one count of filing false tax returns and is scheduled to be sentenced on June 26, 2019. Clarance Jones, 80, pleaded guilty to conspiracy to commit tax fraud and filing false tax returns and is scheduled to be sentenced on Aug. 13, 2019.

From at least 2013 through 2017, Patel and Kinslieh, who were convenience store owners, and others, purchased winning lottery tickets from the ticket holders for cash, at a discount to the value of the tickets, thereby allowing the ticket holders to avoid reporting the winnings on their tax returns – a scheme known as “ten-percenting.” Patel and Kinslieh gave the winning tickets to Jones, who presented them to the Massachusetts State Lottery Commission as his own, and collected the full winnings. Patel did not report to the Internal Revenue Service or pay taxes on the income that she received from the ticket scheme.

United States Attorney Andrew E. Lelling; Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Colonel Kerry A. Gilpin, Superintendent of the Massachusetts State Police, made the announcement today. The Massachusetts State Lottery Commission provided assistance with the investigation. Assistant U.S. Attorney Sara Miron Bloom of Lelling’s Securities and Financial Fraud Unit prosecuted the case.