Financial Crime: ‘A recipe for criminal tax prosecution’: An Ohio man won $1 million in the Powerball lottery but falsely claimed $1 million in losses
Some people can’t help losing, even when they’re winning.
A $1 million Powerball winner has pleaded guilty to falsely claiming on his tax returns that he had frittered away the same amount that year in lottery losses, prosecutors said.
Mustafa Shalash, who lives in Hilliard, Ohio, scored his big Powerball win in 2015, when he correctly picked all five numbers except the special Powerball number, and was awarded a $1 million prize.
Shalash received $710,000 with the remaining $290,000 withheld in taxes, court documents stated. But when Shalash filed his 2015 tax return, he listed $1,069,100 in gambling winnings while also falsely claiming $1,069,100 in gambling losses, enabling him to secure a refund of the taxes that had been withheld.
Prosecutors say Shalash’s gambling losses that year were actually around $300,000. To conceal his Powerball winnings, prosecutors say Shalash had wired the money abroad, mostly to a bank account in Jordan.
Shalash’s attorney said that his client admitted he had made a poor decision and that he intended to pay back the money he owed before his sentencing early next year.
In the following years, prosecutors say, Shalash continued sending money overseas, sometimes by carrying cashier’s checks for tens of thousands of dollars with him on trips to Jordan and elsewhere. Prosecutors say Shalash never filed the required forms with the Treasury Department reporting the transfer of money out of the country.
Between 2014 and 2019, prosecutors said Shalash kept between $576,000 and $910,000 in his account in Jordan but never reported to the IRS that he had money in accounts overseas.
“Concealing bank accounts overseas and inflating losses on a tax return is a recipe for criminal-tax prosecution,” said Bryant Jackson, a criminal investigator with the IRS.
Filing a false income-tax return carries a maximum penalty of three years in prison and a fine of up to $100,000.