HAVERHILL — On Aug. 4 of last year, prosecutors offered to recommend a sentence of six months in jail for James Flaherty and no jail time for his son Kevin Flaherty.

The offer was in exchange for the men agreeing to plead guilty to several charges having to do with cheating and stealing from the city and James Flaherty filing fraudulent state income tax returns, said the Flahertys' lawyer, Scott Gleason.

Gleason said the Flahertys rejected the offer because they believed they had a strong defense to the charges, and because James Flaherty, Haverhill's retired longtime highway superintendent, wanted to try to save his pension, worth about $70,000 a year. Under state law, a person convicted of a felony related to public corruption is not eligible for a public pension.

The Flahertys' choice not to take the deal offered by prosecutors has backfired.

James Flaherty and his son, a former supervisor in the Highway Department, were sentenced yesterday to prison terms by Judge David Lowy in Salem Superior Court, following their convictions June 2 by a jury on felony charges of larceny over $250 by continuous scheme. They were charged with using their city jobs for personal gain.

James Flaherty is to serve six months of his two-year prison sentence under house arrest at his home, with the remaining 18 months to be served on probation. Kevin Flaherty, who worked under his father as an official with the city's Highway Department but has since been fired, was also given a two-year prison sentence, with four months to be served at Middleton jail and the remainder to be served on probation. The judge recommended home confinement for James Flaherty, but it is up to the county sheriff whether to allow it. A sheriff's spokesman said such a recommendation is usually granted.

James Flaherty is now at risk of losing his pension, although his lawyer said he will fight to keep it. Gleason said it is up to the state to notify James Flaherty that it is stopping his pension, and at that point James Flaherty can appeal to the state pension board or a court of law.

"I apologize to the state, my community, my family and my pastor," said James Flaherty, standing to address the judge prior to being sentenced, his voice cracking and tears welling in his eyes. "I'm sorry."

In deciding the sentences for the Flahertys, Lowy said he took into account the fact neither man has a prior criminal record and the likelihood that James Flaherty, 67, and Kevin Flaherty, 37, will lose their pensions. Kevin is eligible for a roughly $12,000-a-year pension when he turns 55.

James Flaherty held at jail for now

Paul Fleming, spokesman for Essex County Sheriff Frank Cousins, said home confinement like that recommended for James Flaherty typically consists of wearing an ankle bracelet at all times and periodic visits by a prison officer. He said those placed into the home confinement program usually spend at least a few days at the jail for processing and medical screening. Gleason said he expects James Flaherty to be at the jail until at least Friday, and that he expects him to spend the entire time in the jail's infirmary due to his poor health. Heart attack, stroke, diabetes and high blood pressure are all part of James Flaherty's medical history, Gleason said. At the trial, Gleason argued that being videotaped by The Eagle-Tribune during his testimony could cause James Flaherty to have a heart attack.

Both Flahertys were immediately taken to the Middleton jail after the judge sentenced them around 4 p.m. yesterday.

James Flaherty was also sentenced to three years of probation for pleading guilty to three tax charges. He must also pay the state income tax on $89,000 in earnings from his private company that he failed to report for the years 2003, 2004 and 2005.

He must also cooperate with the government to determine how much tax money is owed.

Prosecutors said that for those years, James Flaherty did not report income from 18 jobs done by his private paving company in 2003, eight jobs from 2004 and nine jobs from 2005. Prosecutors said police found information about the jobs in accounting books they seized when they raided James Flaherty's Riverdale Avenue home on Jan 31, 2007, the same day they raided the city's highway garage where James Flaherty was the boss and Kevin was a high-ranking official.

Kevin Flaherty was sentenced to three years of probation for his conviction on presentation of false claims charges. He must pay the city $856 in restitution for several parts he bought for his private vehicles and charged to the city. He must also perform 200 hours of community service when he is done serving his jail sentence.

Prosecutors recommended that James Flaherty be ordered to pay $25,000 worth of fines for the larceny and tax-evasion crimes, and that Kevin Flaherty pay $17,000 in fines for his two convictions. But the judge did not require the Flahertys to pay any fines. Gleason successfully argued the now 29-month-old case has financially ruined the Flahertys, and that if James loses his pension, that would be a much greater financial hit than any fines which could be imposed under the sentencing guidelines.

Flaherty critics, supporters attend sentencing

About 30 friends and family members of the Flahertys, including their pastor, and several current Haverhill Highway Department workers who testified against the Flahertys at the nine-day trial, attended the sentencing hearing.

Dozens of Haverhill residents submitted letters to the judge in support of James and Kevin Flaherty. Several city workers joined Mayor James Fiorentini in writing victim-impact letters. Five city employees urged the judge to impose maximum sentences for both Flahertys, and the mayor asked that the men be ordered to make full financial restitution to the city.

"While the city deserves restitution for those matters for which the Flahertys were convicted, the real damage was to the city's reputation and the reputation of our employees, the overwhelming number of whom have always been honest and hard working," Fiorentini said in his letter.

The mayor said his office has received many phone calls since the Flaherty scandal erupted more than two years ago, alleging other city workers were misappropriating equipment or supplies or doing private jobs on city time.

"In every instance, we have spent time, energy and tax dollars investigating those complaints. In every instance they proved to be false," the mayor wrote.

"But the damage to our image has been done. People now believe that work is not getting done by the Highway Department because workers are misusing time."

Fiorentini also praised several workers who assisted with the state's investigation of the Flahertys.

"Our employees are best represented by the large numbers of employees who braved ridicule and job loss, and assisted in the investigation, testified as to the truth and helped expose wrongdoing," the mayor wrote. "They are the true heroes in this affair."

Highway workers make victim statements

Some of those who testified against the Flahertys attended the sentencing hearing and submitted their own impact statements to the judge. They included Highway Department secretary Marie Boisselle and department laborer Charles Gately, who helped investigators build their case as a secret informant.

"I used to be proud to say I had a 35-year career working for the city of Haverhill. Now I feel ashamed and embarrassed," Highway foreman Raymond Bradshaw wrote in his statement.

Bradshaw said his life changed as a result of the crimes committed by the Flahertys.

"Financially, I suffered by losing countless hours of overtime due to nepotism," Bradshaw wrote.

"Emotionally, I spent countless days on the job dealing with high levels of unnecessary stress caused by Kevin Flaherty. The position he held was created specifically for him, by his father, due to the fact Kevin could not get along with any members of the department due to his self-inflated ego."

Alphonse Frasca, a craftsmen with 24 years in the department, said he was passed over for a promotion in favor of Kevin Flaherty.

"I was always hoping to become a foreman to increase my pay, having a family with three children," Frasca wrote.

"Due to the fact Kevin started seven years after I started, I feel he was promoted instead of me because he was the superintendent's son. ... Unfortunately there was nothing that could be done about this. If I had disputed this, it would have resulted in repercussions at work."

Marie Boisselle, James Flaherty's secretary, said James Flaherty told her when Fiorentini took over as mayor that Fiorentini was warned to leave him alone.

"I never knew the Inspector General's office existed until the day we were raided on Jan. 31, 2007," Boisselle wrote to the judge. "At that time and over the next few months I felt it was my turn to unveil all of the wrongdoings that were causing me emotional harm. This was also very hard for me because I did have a good relationship with Jim Flaherty. He was extremely nice to me both as a boss and friend. I now realize that he was a manipulator."

Boisselle said the scandal has effected her family and her health, causing sleepless nights, anxiety, stomach aches and high blood pressure.

Her husband, Peter Boisselle, also works at the Highway Department as a foreman.

He also wrote a letter to the judge calling Kevin Flaherty "power-hungry" and asking for the maximum sentence against the Flahertys.

"I feel the court should take into account all the stress this has caused all the employees of the Highway Department,'' Marie Boisselle wrote.

"It will probably take us years to win back the trust of the citizens of Haverhill, something we are left here to do because of the Flaherty's actions for personal interest and financial gain.''

Court receives letters supporting Flahertys

The letters in support of the Flahertys were not immediately available yesterday. But Gleason summarized one letter in open court.

It was from Harry McNamara, a well-know former Haverhill football coach and supporter of youth activities in the city for decades. Gleason called McNamara "Mr. Haverhill" and said McNamara's opinion that James Flahety is a man of character and honesty is the prevalent one among the Haverhill public.

Gleason used McNamara's letter to refute the contention of prosecutors that the Haverhill community is united in their anger and outrage against the Flahertys.

"James Flaherty has done much for this community and raised a fine family," Gleason said, quoting from McNamara's letter.

"He is a pillar of our church. He should been seen for what he has done over many years, not just one bad act."