Massachusetts mayor accused of using a pandemic loan to fund election campaign and pay his taxes

BOSTON (AP) — A Massachusetts mayor was arrested Friday and charged with fraudulently obtaining a pandemic loan and using the money to fund his election campaign as well as pay off high-interest mortgages on several of his properties and personal taxes.

Lawrence Mayor Brian DePena was charged Friday with one count of wire fraud and one count of money laundering.

DePena, 61, is accused obtaining a COVID-19 small-business loan worth $1.5 million for his tire sales business. Rather than using the money for the business, DePena allegedly spent more than $880,000 to pay off high-interest mortgages on various businesses and put $90,000 into his mayoral campaign fund ahead of the 2021 election. DePena has been mayor since 2021 and previously served on the Lawrence City Council.

Ted Docks, the special agent in charge of the FBI’s Boston Division, accused DePena of “cashing in on a public health crisis and blatantly defrauding a government program meant to keep businesses afloat during the pandemic.”

“When elected officials misuse federal funds for personal gain, they’re breaking the trust of their constituents — and breaking the law,” Docks said in a statement. “Together, with our partners, the FBI will continue to doggedly pursue anyone who defrauds the federal government. You’ll be prosecuted to the fullest extent of the law, and that ‘easy money’ won’t seem so easy after all.”

DePena made an initial appearance in federal court in Boston Friday afternoon. DePena was released after agreeing to several conditions, including turning over his passport and not seeking any loans without court approval.

After leaving court, DePena's lawyer Carlos Apostle repeatedly responded with “no comment” to questions. DePena, who is a citizen of the United States and Dominican Republic, responded with “God bless” when asked if he would resign. He made no other comments.

In 2020 and 2021, DePena obtained a government disaster loan for Tenares Tire Services Inc., a tire sales and automotive services in Lawrence. During the pandemic, the Small Business Administration offered loans to qualified business that were suffering financial losses.

He used a loan of $150,000 for the business. A year later, prosecutors say, DePena's mayoral campaign was running short of cash, he owed back taxes and was under pressure to pay back high-interest loans on several of his properties in Lawrence. He then requested several increases to the government loan and allegedly used $1.5 million to cover those expenses unrelated to his tire business.

If convicted on the wire fraud charge, DePena faces up to 20 years in prison, three years of supervised release and a fine of up to $250,000. He faces a sentence of up to 10 years in prison, three years of supervised release and a fine of $250,000 if convicted on the money laudering charge.