BOSTON — A former high-ranking Keolis employee has been sentenced to more than five years in federal prison for stealing more than $8 million intended to operate the MBTA commuter rail system and for defrauding the IRS of over $2.6 million, the U.S. Attorney said Friday.
John P. Pigsley, 59, who formerly worked as Assistant Chief Engineer of Facilities for Keolis Commuter Services, was sentenced Thursday in federal court in Boston to 70 months in prison with three months of supervised release, U.S. Attorney Leah Foley said in a statement.
U.S. District Court Judge Indira Talwani also ordered Pigsley to pay $8,580,311 restitution to Keolis and $2,689,206 to the Internal Revenue Service, forfeiture of three real properties and a $7,687,083.70 money judgment.
Pigsley pleaded guilty in January to five counts of wire fraud, one count of conspiracy to commit wire fraud, six counts of tax evasion, one count of filing a false tax return and four counts of structuring financial transactions to evade reporting requirements.
Pigsley and John Rafferty, the ex-general manager of a Massachusetts-based electrical company, were charged in April 2023.
Prosecutors said Pigsley pocketed millions of dollars in cash by stealing and scrapping copper wire bought by Keolis as part of an elaborate scheme.
Since 2014, Keolis has operated the MBTA commuter rail system under an annual contract of $291 to $349 million.
Between 2014 and November 2021, Pigsley worked as Keolis’ Assistant Chief Engineer of Facilities. He responsible for the maintenance of MBTA Commuter Rail Facilities and their engineering operations, including repairs. He also ordered materials and approved his subordinates’ orders of electrical supplies from outside vendors for Keolis.
Pigsley also ran a separate construction company called Pigman Group.
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, Pigsley and Rafferty defrauded Keolis of over $4 million through a false LJ Electric invoicing scheme, prosecutors said.
Specifically, Rafferty bought vehicles, construction equipment, construction supplies and other items for Pigsley, Pigman Group and others, and Pigsley directed Rafferty to recover the cost of these items by submitting false and fraudulent LJ Electric invoices to Keolis, prosecutors said.
Rafferty spent more than $3 million on items for Pigsley and others, prosecutors said, 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– for which Keolis paid Rafferty more than $4 million based on false LJ Electric invoices.
In addition to the false invoicing scheme, Pigsley directed Keolis to buy copper wire which he then stole and sold to scrap metal businesses, keeping the cash proceeds for himself, prosecutors said.
To hide the theft, Pigsley personally picked up the copper wire orders from vendors or had the orders delivered to his Beverly home, prosecutors said.
Pigsley then personally took the wire to scrap yards where he traded it for thousands of dollars in cash several times a month and sometimes more than once a day, prosecutors said.
Pigsley obtained more than $4.5 million in cash by stealing and scrapping the copper wire.
In addition, Pigsley defrauded the IRS by failing to withhold and pay federal income taxes on income he received from the LJ Electric invoicing scheme and from scrapping copper wire, prosecutors said.
Pigsley also filed a false tax return for the tax year 2016, prosecutors said. He deposited over $1.9 million in cash into his bank accounts between 2014 and 2021 and structured some of those deposits to evade currency transaction reporting requirements applicable to financial institutions.
Rafferty pleaded guilty in June 2023 to one count of conspiracy to commit wire fraud.
Rafferty is scheduled to be sentenced on May 15.
This is a developing story. Check back for updates as more information becomes available.
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