On June 30, 2009, former Haverhill Highway Department Superintendent James Flaherty and former Highway Department Supervisor Kevin Flaherty were sentenced by a Salem Superior court judge. The Flaherty's were convicted on June 2, 2009 of multiple felonies related to their abusing of their public positions to benefit their private business interests.

James Flaherty, 65, was convicted of the felony charge of Larceny over $250 by Continuous Scheme. Additionally James Flaherty agreed to plead guilty to tax evasion charges. James Flaherty received a two-year sentence which upon the recommendation of the Essex County Sheriff, is expected to be served in the form of six months of home confinement with the remainder of his sentence to be served under probation.

Kevin Flaherty, 35, was convicted of the felony charge of Larceny over $250 by Continuous Scheme and Presentation of False Claims. Kevin Flaherty received a two-year sentence in the House of Corrections. He is expected to serve four months of incarceration with the remainder of his sentence to be served under probation. Additionally Kevin Flaherty was sentenced to three years probation for the False Claims conviction, ordered to pay restitution of $865 and must serve 200 hours of community service.

The conviction and sentences of the Flaherty's are a result of a multi-year joint investigation conducted by the Massachusetts Office of the Inspector General, the Massachusetts State Police and the Massachusetts Attorney General's Office.

Additionally, on July 14, 2009, the City of Haverhill Pension Board voted to suspend James Flaherty's $65,494 annual pension.