Ex-Keolis Employee Charged in Scheme to Steal $8M Meant for MBTA Commuter Rail Repairs

John Pigsley, 58, of Beverly, the company's former assistant chief engineer, was indicted by a federal grand jury on over a dozen charges

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A former Keolis employee is facing federal charges in connection with a scheme to defraud the company of over $8 million meant for MBTA Commuter Rail repairs and renovations.

John P. Pigsley, 58, of Beverly, former assistant chief engineer for Keolis Commuter Services, was indicted by a federal grand jury on 17 charges, including wire fraud, conspiracy to commit wire fraud, tax evasion, filing a false tax return and structuring financial transactions to evade reporting requirements. He was arrested Wednesday morning and was scheduled to appear in federal court in Boston later in the day.



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Keolis has operated the MBTA Commuter Rail system since 2014.

Also charged was John Rafferty, 69, of Hale's Location, New Hampshire, the former general manager of LJ Electric. Prosecutors said he has agreed to plead guilty to one count of conspiracy to commit wire fraud for his role in the scheme.

“There is perhaps no single state agency that impacts the daily lives of the millions of people who live and work in the greater Boston area more than the MBTA. Over the last few years, T ridership has had to endure its fair share of both acute and chronic issues. Today, unfortunately, we add fraud to that list," U.S. Attorney Rachael Rollins said in a statement. "The criminal conduct alleged here specifically involves the Commuter Rail – the entity Keolis operates for the T – and two men who lied to, cheated and stole from Keolis."

She added that the $8 million that Pigsley and Rafferty stole "could have been used to ensure significantly safer, faster and more reliable transportation for riders. Instead, these men lined their pockets for their own selfish gain. It is my hope that this prosecution holds these alleged criminals accountable.”

The man in charge of major construction projects at the MBTA over the past several years is out as the agency falls under new leadership.

According to the charging documents, between 2014 and November 2021, Pigsley was employed as Keolis’ assistant chief engineer of facilities and was responsible for the maintenance of MBTA Commuter Rail facilities and their engineering operations, including handling corrective repair and project management for assets and maintenance and ordering and approving his subordinates’ orders of electrical supplies from outside vendors for Keolis.

Pigsley also operated a separate construction company called Pigman Group.

Rafferty was the general manager of LJ Electric, an electrical supply vendor to which Keolis paid over $17 million between 2014 through 2021.

Between July 2014 and November 2021, prosecutors said Pigsley and Rafferty defrauded Keolis of over $4 million through a false LJ Electric invoicing scheme. They said Rafferty purchased 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. The fraudulent LJ Electric invoices included a percentage profit that Rafferty allegedly kept for himself.

It is further alleged that Rafferty spent more than $3 million on items 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– for which Keolis paid Rafferty more than $4 million based on false LJ Electric invoices. 

In addition, prosecutors said Pigsley directed Keolis to purchase copper wire which he then stole and sold to scrap metal businesses, keeping the cash proceeds for himself. To conceal the theft, it is alleged that Pigsley personally picked up the copper wire orders from vendors or had the orders delivered to his Beverly home. Pigsley allegedly then personally transported 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. According to the charging documents, Pigsley obtained more than $4.5 million in cash by stealing and scrapping the copper wire. 

Pigsley also 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. They said he also filed a false tax return for 2016 and deposited over $1.9 million in cash into his bank accounts between 2014 and 2021, some of which were structured to evade currency transaction reporting requirements.

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