Lawrence, Massachusetts Mayor Brian DePena, 61, was arrested Friday and charged with one count of wire fraud and one count of money laundering following an investigation into his alleged misuse of pandemic relief funds. DePena was released pending further court proceedings after agreeing to surrender his passport and refrain from seeking loans without court approval.
Federal prosecutors allege DePena fraudulently obtained more than $1.5 million in Small Business Administration (SBA) Economic Injury Disaster Loans (EIDL) for his tire sales business, Tenares Tire Services Inc., between 2020 and 2021. The loans were intended to support business operations during the COVID-19 pandemic.
Key allegations:
- $880,000+ allegedly used to pay off high-interest mortgages on multiple properties.
- $90,000 allegedly transferred to DePena’s 2021 mayoral campaign fund, characterized as campaign loans.
- $85,000 allegedly used to pay personal IRS tax debts.
- Additional funds were allegedly deposited into personal accounts and used for unspecified purposes.
DePena, who has served as mayor since 2021 and previously on the Lawrence City Council, is scheduled to appear in federal court in Boston for an initial hearing. His attorney and representatives did not respond to requests for comment.
Federal response
The FBI’s Boston Division, in coordination with the Internal Revenue Service Criminal Investigation (IRS-CI), led the investigation. Special Agent in Charge Ted Docks stated in a press release that DePena’s alleged actions represented a betrayal of public trust and a violation of federal law.
"When elected officials misuse federal funds for personal gain, they’re breaking the trust of their constituents — and breaking the law," Docks said. "The FBI will continue to pursue anyone who defrauds the federal government."
The U.S. Attorney’s Office for the District of Massachusetts emphasized that the EIDL program was designed to assist businesses suffering economic harm due to the pandemic, with funds restricted to eligible business expenses such as payroll, rent, and utilities.
Loan timeline and amounts
- June 2020: DePena initially received a $150,000 EIDL loan, which prosecutors allege was used primarily for legitimate business expenses.
- 2021: Following financial pressures, including personal tax debt and campaign expenses, DePena allegedly sought and received multiple loan increases. By August 2021, the total loan amount reached $1.65 million.
- Prosecutors allege that $350,000 of the 2021 disbursement was deposited into his business account, with over $1.15 million subsequently transferred to personal accounts.
The SBA has not commented publicly on the case. The Small Business Administration’s Office of Inspector General typically oversees fraud investigations related to its loan programs.
Legal and political implications
The charges carry potential penalties of up to 20 years in prison for wire fraud and 10 years for money laundering, in addition to significant fines and restitution. The case raises questions about oversight mechanisms within pandemic relief programs and the accountability of public officials.
DePena’s arrest follows a broader federal crackdown on fraud related to COVID-19 relief programs. The Department of Justice has previously highlighted efforts to recover billions in misspent funds, including through initiatives targeting fraudulent EIDL and Paycheck Protection Program (PPP) loans.
The investigation remains ongoing, with federal authorities continuing to review financial records and transactions linked to DePena and Tenares Tire Services Inc.