Hale's Location resident pleads guilty to plot to defrauding MBTA
Apr. 5—A resident of a Mount Washington Valley resort community has pleaded guilty to his involvement in a plot that defrauded the MBTA of more than $8 million, federal authorities announced Wednesday.
John Rafferty, 69, of Hale's Location, agreed to plead guilty to a single charge of conspiracy to commit wire fraud. He has agreed to pay restitution of about $4 million and could be required to forfeit other assets, according to papers prosecutors filed in connection with the case.
Rafferty, who founded and ran an electric supply distribution business, LJ Electric Supply, conspired with the assistant chief engineer of Keolis Commuter Services, a private company that operates the Massachusetts Bay Transportation Authority's commuter rail system under annual contracts that can reach $349 million, according to court documents.
Rafferty did not return a message left on his phone.
One of the largest government authorities in Massachusetts, the MBTA provides bus, commuter rail, ferry and subway service in the greater Boston area.
"Over the years, T ridership has had to endure a fair share of both acute and chronic issues. Today, unfortunately, we add fraud to that list," said Rachel Rollins, the top federal prosecutor in Massachusetts, in a statement announcing the charges.
Hale's Location, an unincorporated area of 6.4 square miles west of North Conway, is home to the White Mountain Hotel and Resort and its nine-hole golf course. Its population was 132 according to the 2020 U.S. census.
According to the Zillow real estate website, the address listed for Rafferty in online telephone directories is a four-bedroom, 3,429-square-foot home valued at $908,000.
In a 2019 article, the Conway Daily Sun reported that John and Linda Rafferty had operated Rafferty's Restaurant and Pub in North Conway from 2006 until they retired in 2017.
They had bought a vacation home in the Conway area and still worked in Massachusetts. They served a free community Thanksgiving meal for several years.
According to federal authorities, the scheme involved Rafferty purchasing items for the Keolis engineer, John P. Pigsley, 58, and submitting false items to Keolis for the items, which included vehicles, a camper, a motorcycle trailer, construction equipment and construction supplies that Piglsey used either for his company or his personal use.
Rafferty allegedly benefited two ways. He boosted the price of the purchases as much as 30% and pocketed the money, and Pigsley's company performed work on Rafferty's "family projects" for free, according to filings.
A federal grand jury has brought 17 charges against Pigsley, including wire fraud conspiracy, tax evasion and financial reporting crimes.
Rafferty faces only the single charge, to which he pleaded guilty last month.
He faces up to five years in prison, but in filings prosecutors say they will recommend he be sentenced at the lower end of guidelines. A plea agreement between prosecutors and Rafferty does not make an explicit mention that he testify against Pigsley.
A telephone call and email to Rafferty's lawyer, Michael Contant of Woburn, Mass., were not immediately returned.
