In June 2009, a district court jury convicted two employees of the city of Haverhill's Highway Department, James Flaherty, Superintendent and his son Kevin Flaherty, Foreman, of larceny and other charges in connection with a scheme to use city personnel, material, and equipment on private contracting jobs on city time over a period of several years. Prior to trial, James Flaherty pled guilty to filing false tax returns.

The Inspector General's Office investigated this case with the Massachusetts State Police and the Office of the Attorney General, which also prosecuted the case.

As a result of the conviction, the court sentenced James Flaherty to two years in the House of Correction with six months to serve and the balance suspended. The court also ordered him to file accurate tax returns and pay the state what he owes in unpaid taxes. The court sentenced Kevin Flaherty to two years in the House of Correction with four months to serve and the balance suspended and ordered him to pay $857 in restitution to the city and perform 200 hours of community service.

Subsequent to the conviction, the Haverhill Retirement Board stripped James Flaherty of his pension. James Flaherty has been appealing the Board's decision and the ruling by the Superior Court cited above concluded his most recent appeal effort. It is unknown whether he plans a further appeal.