Pandemic cash, campaign checks, FBI arrest: Sitting Democratic mayor faces fraud charges

BOSTON, MASS: Lawrence Mayor Brian DePena has been arrested on federal fraud and money laundering charges after prosecutors accused him of fraudulently obtaining more than $1.5 million in taxpayer-funded COVID-19 relief loans and diverting the money for personal expenses, campaign financing and private real estate debts.

Federal authorities allege DePena, a Democrat serving his second term as mayor, transformed a pandemic aid program created to help struggling businesses into a source of personal and political funding.

According to charging documents unsealed Friday, August 14, the alleged scheme included using federal Economic Injury Disaster Loan (EIDL) proceeds to pay personal IRS tax liabilities, transfer money into his mayoral campaign and eliminate nearly $900,000 in high-interest mortgage debt.

The charges accuse a sitting mayor of using a federal pandemic relief program to finance personal expenses, political activities and private debts, turning a COVID-era loan program into the center of a public corruption case.

Prosecutors detail alleged scheme

According to the Justice Department, DePena applied for multiple Small Business Administration Economic Injury Disaster Loans through his automotive business, Tenares Tire Services, during the COVID-19 pandemic.

While investigators acknowledge the initial loan was largely used for legitimate business purposes, prosecutors allege DePena later sought two substantial loan increases after facing mounting personal financial pressure during his 2021 mayoral campaign.

Charging documents state that after receiving additional loan proceeds, DePena allegedly diverted $85,000 to pay personal federal tax obligations, transferred hundreds of thousands of dollars into personal accounts, and wrote checks totaling more than $130,000 to his campaign committee, characterizing them as personal loans.

Federal prosecutors also allege he used approximately $883,000 in pandemic relief money to pay off private hard-money lenders whose loans carried interest rates significantly higher than the federally subsidized disaster loans.

DOJ frames case as betrayal

Federal officials described the allegations as an abuse of emergency assistance intended to keep small businesses operating during one of the nation's worst economic crises.

US Attorney Leah Foley alleged DePena betrayed the trust placed in him by residents, while the FBI said the relief program was never intended to function as a personal financial reserve for elected officials.

IRS Criminal Investigation officials similarly said pandemic assistance was created to protect businesses, not finance political campaigns or eliminate private debts.

Authorities also noted that, as of August 2026, the outstanding principal balance on the loan remained approximately $1.65 million.

Fraud crackdown gathers pace

The prosecution comes as the Justice Department expands its nationwide effort to pursue alleged fraud involving federal benefit programs.

Earlier this year, the department created the National Fraud Enforcement Division, while US Attorney Leah Foley also established a Massachusetts-based Benefit & Voter Fraud Team focused on investigating misuse of taxpayer-funded assistance.

DePena has been charged with one count of wire fraud and one count of money laundering. If convicted, the charges carry potential prison sentences of up to 20 years for wire fraud and 10 years for money laundering, in addition to financial penalties.

The allegations remain unproven, and DePena is presumed innocent unless and until proven guilty in federal court.