Former Boxford plumber sentenced to one year in tax fraud scheme

·4 min read

Jun. 2—BOXFORD — A Boxford man who lost his plumbing license four years ago is now heading to federal prison for a year for failing to report more than $3.7 million in business income — a significant portion of which, federal prosecutors say, was obtained by defrauding customers, including elderly and disabled individuals.

Jared "Jay" Derrico, 35, of 24 Haymeadow Road, Boxford, was the owner of Derrico Services and The Pipe Surgeon — businesses he continued to run even after losing his plumbing license in 2018, court papers say.

Among the customers who were defrauded by Derrico, prosecutors say, were homeowners from Danvers, Ipswich, North Andover, Andover and Newbury.

"For at least four years, the defendant prospered through fraud," prosecutors in U.S. Attorney Rachael Rollins' office wrote in a sentencing memorandum. "He defrauded his customers, and he cheated on his taxes. The motive for these crimes was greed." They asked for a 3 1/2 year federal prison term.

But Derrico's attorney, Carmine Lepore, characterized his client as someone who started a plumbing business with "earnest" intentions but who lacked experience running a business and became "overwhelmed." He asked U.S. District Court Judge Rya Zobel to spare Derrico from serving any time, saying that incarcerating Derrico would destroy what is left of his business, hurt his family, and hinder him from making restitution to the victims.

Lepore said in his sentencing memorandum that Derrico is a "very hard worker and legitimately helps many people."

Even as Derrico quickly agreed to waive indictment in the case last winter as investigators closed in, he continues to dispute the extent of money he is accused of overcharging customers — something that remains an open question both for Derrico and the 11 named victims described in court papers.

"No doubt he may have done wrong by the victims, but he did do real work for each of them, and there remains a factual dispute as to the extent of work diligently performed by Mr. Derrico," Lepore wrote.

He said his client is willing to make restitution but not for work he actually performed or materials he ordered.

Prosecutors, meanwhile, say Derrico made it hard to determine exactly what was and wasn't done for customers.

"Customers came to him in need, with a repair that had to be done, and sought his professional advice and help," federal prosecutors wrote. "Speaking as a purported expert, Derrico found problems that he could 'fix,' but as often as not, he did not fix them — if they existed at all — even though he charged his customers for his services. The extent of his fraud is, by its nature, hard to detect because his purported repairs obscured the conditions he found when he arrived."

Among the victims was an elderly Danvers man who hired Derrico to fix a sink and disposal and reconnect a hot water line to a washer. Prosecutors say Derrico convinced the man to pay more than $87,000 to replace all of the pipes in his basement, frightening the man by suggesting that his home was at risk of flooding, catching fire or even exploding.

A North Andover couple who hired Derrico paid him at least $643,000 after he told them they had a mold issue in their basement and, prosecutors say, conducted unnecessary demolition work and other work. Lepore said in a court filing that the couple contracted directly with a mold remediation specialist and that the additional work was the result of requested changes by one member of the couple.

An Ipswich man with a brain injury paid Derrico $167,450 for work prosecutors say was never done; Lepore says the customer kept sending Derrico checks, some of which he did not cash.

A Newbury woman paid $10,600 for what the town's plumbing inspector later concluded should have been about $2,000 worth of work.

And an Andover man paid $208,000 to replace pipes; after law enforcement became involved in the matter, Derrico offered a partial refund. His attorney said Derrico is waiting for the customer to sign a release to send the refund.

Other victims include a property owner in Boston who hired Derrico to install air conditioning units — which were not installed — and customers in Newton, Saugus, Medford and Watertown.

Prosecutors say in addition, customers would pay Derrico with checks, which he'd then cash or deposit into his personal account, and not the business account his tax preparer relied on to file his tax returns.

Had Derrico paid taxes on the unreported income, he would have owed $1.45 million in additional taxes. Zobel ordered that he must pay that amount in restitution to the IRS, forfeit $315,000 in cash, and additional restitution to his customers, to be determined at a future hearing in the case.

The U.S. Attorney's office, which investigated along with the IRS and postal inspectors, also credited the work of the Ipswich Police Department in the case.

Courts reporter Julie Manganis can be reached at 978-338-2521, by email at or on Twitter at @SNJulieManganis

Courts reporter Julie Manganis can be reached at 978-338-2521, by email at or on Twitter at @SNJulieManganis