Date: June 13, 2023 Contact: newsroom@ci.irs.gov BOSTON — The general manager of a Massachusetts-based electrical company pleaded guilty yesterday in connection with a false invoicing scheme that defrauded Keolis Commuter Services (Keolis) of over $4 million. John Rafferty of Hale's Location, N.H., pleaded guilty to one count of conspiracy to commit wire fraud. U.S. Senior District Court Judge William G. Young scheduled sentencing for Sept. 18, 2023. Rafferty was charged on April 4, 2023 and his alleged co-conspirator, John P. Pigsley, was charged in a separate case on the same day. Keolis has operated the MBTA commuter rail system since 2014 under an annual contract of $291–$349 million. Rafferty was the general manager of LJ Electric, Inc., an electrical supply vendor to which Keolis paid over $17 million between 2014 through 2021. Between July 2014 and November 2021, Rafferty and, allegedly, Pigsley defrauded Keolis of over $4 million through a false LJ Electric invoicing scheme. Specifically, Rafferty spent more than $3 million on items allegedly for Pigsley and others – including: at least nine trucks; construction equipment including at least seven Bobcat machines; at least $1 million in home building supplies and services; and a $54,000 camper. Rafferty then recovered the cost of these items by submitting false and fraudulent LJ Electric invoices to Keolis, which also included a percentage profit that Rafferty kept for himself. The charge of conspiracy to commit wire fraud provides for a sentence of up to five years in prison, up to three years of supervised release and a fine of up to $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case. Acting United States Attorney Joshua S. Levy; Joleen D. Simpson, Special Agent in Charge of the Internal Revenue Service's Criminal Investigation in Boston; Christopher DiMenna, Acting Special Agent in Charge of the Federal Bureau of Investigation, Boston Division; and U.S. Department of Transportation, Office of Inspector General's Special Agent-in-Charge is Christopher A. Scharf made the announcement today. Assistant U.S. Attorneys Kristina E. Barclay and Elysa Q. Wan of Levy's Public Corruption & Special Prosecutions Unit are prosecuting the cases. The details contained in the charging documents are allegations. The remaining defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
