FBI Arrests Massachusetts Mayor Over $1.5M COVID Fraud

Lawrence, Massachusetts Mayor Brian DePeña was arrested Friday on federal charges that he funneled more than $1.5 million in pandemic-era small-business loans into his political campaign and his own debts.

DePeña, 61, a two-term Democrat first elected in 2021, is charged with one count each of wire fraud and one count of money laundering, federal prosecutors said.

The FBI's Boston Division and IRS Criminal Investigation made the arrest. DePeña was set to make an initial appearance Friday in federal court in Boston.

What Prosecutors Allege

According to federal prosecutors, DePeña applied in 2020 and 2021 for Economic Injury Disaster Loans — EIDL money the Small Business Administration handed out during the COVID-19 pandemic — on behalf of Tenares Tire Services Inc., a Lawrence business he owned.

SBA rules limited that money to "working capital" meant to offset pandemic damage to the business.

Prosecutors say Tenares Tire initially put most of the funds into the business. But by early 2021, they allege, DePeña was strapped for cash: his mayoral campaign was struggling to pay bills, he owed back taxes to the IRS, and he carried nearly $900,000 in private-lender mortgage debt on properties around Lawrence.

Charging documents cite text messages DePeña allegedly sent his accountant and financial advisor while waiting on an increase to the Tenares Tire loan. The messages were translated from Spanish. "Brother, call me, I'm in trouble. I don't want to pressure you, but I don't have time to wait for this loan. I'm in your hands," one message dated July 22, 2021 read.