(86)Y is a PET agent that could be used as an ideal surrogate to allow personalized dosimetry in (90)Y radionuclide therapy. However, (86)Y also emits cascade gamma rays. We have developed a Monte Carlo program based on SimSET (Simulation System for Emission Tomography) to model cascade gamma rays in PET imaging. The new simulation was validated with the GATE simulation package. Agreements within 15% were found in spatial resolution, apparent scatter fraction (ratio of coincidences outside peak regions in line source sinograms), single and coincidence statistics and detected photons energy distribution within the PET energy window. A discrepancy of 20% was observed in the absolute scatter fraction, likely caused by differences in the tracking of higher energy cascade gamma photons. On average, the new simulation is 6 times faster than GATE, and the computing time can be further improved by using variance reduction techniques currently available in SimSET. Comparison with phantom acquisitions showed agreements in spatial resolutions and the general shape of projection profiles; however, the standard scatter correction method on the scanner is not directly applicable to (86)Y PET as it leads to incorrect scatter fractions. The new simulation was used to characterize (86)Y PET. Compared with conventional (18)F PET, in which major contamination at low count rates comes from scattered events, cascade gamma-involved events are more important in (86)Y PET. The two types of contaminations have completely different distribution patterns, which should be considered for the corrections of their effects. Our approach will be further improved in the future in the modeling of random coincidences and tracking of high-energy photons, and simulation results will be used for the development of correction methods in (86)Y PET.