Former Keolis Assistant Chief Engineer Pleads Guilty to Defrauding Keolis Commuter Services

Press Release

Defendant stole over $8 million meant to operate the MBTA commuter rail system

BOSTON - The former Assistant Chief Engineer of Facilities for Keolis Commuter Services (Keolis) pleaded guilty today to defrauding Keolis of over $8 million and to defrauding the IRS.

John P. Pigsley, 59, pleaded guilty 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. U.S. District Court Judge Indira Talwani scheduled sentencing for April 17, 2025. Pigsley and his co-conspirator John Rafferty were charged in April 2023.

Keolis has operated the MBTA commuter rail system since 2014 under an annual contract of $291-$349 million. 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 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, 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. Specifically, 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. 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 to the false invoicing scheme, 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, Pigsley personally picked up the copper wire orders from vendors or had the orders delivered to his Beverly home. Pigsley 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. 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. Pigsley also filed a false tax return for the tax year 2016. Additionally, Pigsley 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.

The charges of wire fraud and wire fraud conspiracy provide for a sentence of up to 20 years in prison, up to three years of supervised release and a fine of up to $250,000. The charge of tax evasion 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. The charge of filing a false tax return provides for a sentence of up to three years in prison, up to one year of supervised release and a fine of up to $250,000. The charge of aggravated structuring provides for a sentence of up to 10 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.

In June 2023, Rafferty pleaded guilty to one count of conspiracy to commit wire fraud. Rafferty is scheduled to be sentenced on April 10, 2025.

United States Attorney Leah B. Foley; Jodi Cohen, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division; Thomas Demeo, Acting Special Agent in Charge of the Internal Revenue Service Criminal Investigation, Boston Field Office; and Christopher A. Scharf, Special Agent in Charge of the U.S. Department of Transportation, Office of Inspector General, Office of Investigations made the announcement today. Assistant U.S. Attorney Kristina E. Barclay of the Public Corruption & Special Prosecutions Unit is prosecuting the cases.

Updated January 23, 2025