Federal agents arrested Lawrence, Massachusetts, Mayor Brian DePena on wire fraud and money laundering charges for allegedly diverting more than $1.5 million in pandemic-era small business loans to his campaign, his tax debts, and his personal mortgage payments.
DePena, 61, a Democrat who has led the Boston suburb since 2021, was taken into custody Friday morning after a federal investigation found he allegedly used COVID-era Economic Injury Disaster Loan funds, meant to keep struggling businesses afloat, as a personal slush fund. He appeared in Boston federal court Friday afternoon and was released under conditions that included surrendering his passport, AP News reported.
The federal complaint lays out a paper trail stretching back to May 2020, when DePena applied for an EIDL on behalf of his auto service and tire shop, Tenares Tire Service Inc. The SBA approved a $150,000 loan the following month. DePena went back for more, a $350,000 modification in April 2021, then a second bump in October 2021 that brought the total to $1.1 million, all at a 3.75 percent interest rate. Prosecutors say the money never went where it was supposed to.
Between August and October 2021, DePena allegedly transferred nearly $90,000 from his business accounts into personal accounts. He also allegedly wrote checks totaling more than $42,000 directly to "The Committee to Elect Brian DePena", his mayoral campaign committee. That November, he won the mayor's race in Lawrence.
The biggest alleged diversion dwarfed the campaign checks. Prosecutors say DePena funneled $883,293 in EIDL proceeds to pay off high-interest mortgages on personal properties in Lawrence. Another $85,000 allegedly went to the IRS to settle his personal back taxes.
EIDL funds carried explicit restrictions. They were to be used only to alleviate pandemic-related financial struggles for the borrower's business, not to retire personal debt, not to bankroll a political campaign, and not to settle a tax bill. Fox News Digital reported that DePena faces one count of wire fraud and one count of money laundering, carrying a combined maximum sentence of 30 years in prison and fines up to $500,000.
As of August 5, DePena had made just 16 payments on the loan, totaling $130,160. Because those payments covered only accrued interest, the outstanding balance still sat at roughly $1.65 million, more than the original principal.
The complaint includes translated Spanish text messages DePena allegedly sent to an unnamed financial advisor who helped him with the EIDL application. The messages paint a picture of a man desperate for money, and uninterested in the rules attached to it.
U.S. Attorney Leah B. Foley said in a statement:
"Mayor DePena was elected to be a leader for the City of Lawrence. He was looked up to and trusted by his constituents, but he betrayed that trust through his alleged corruption and lies. Today's arrest is just another example of our determination to root out fraud by anyone, even public officials, and hold elected officials accountable."
In one message, DePena allegedly wrote: "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." In another: "I know I'm bothering you a lot, but I have no other option. Only you can give me what I need."
When DePena's second loan modification came through in October 2021, he allegedly could not access the funds for a month, a delay prosecutors described as causing him to "panic." The urgency had nothing to do with keeping his tire shop open. It had everything to do with cash flow problems DePena had created for himself, prosecutors allege.
The case fits a broader pattern of COVID-era relief fraud that federal investigators are still unwinding years later. The Department of Justice has launched enforcement actions tied to anti-fraud task forces targeting millions in pandemic loan schemes across the country.
DePena's arrest was not a quiet affair. FBI agents descended on his home with a bullhorn and a battering ram, the New York Post reported. The dramatic scene underscored how seriously federal law enforcement is treating the case.
FBI Boston Special Agent in Charge Ted E. Docks did not hold back. "The FBI arrested Mayor Brian DePeña for allegedly cashing in on a public health crisis and blatantly defrauding a government program meant to keep businesses afloat during the pandemic," Docks said.
Docks added a warning aimed well beyond Lawrence:
"When elected officials misuse federal funds for personal gain, they're breaking the trust of their constituents, and breaking the law. You'll be prosecuted to the fullest extent of the law, and that easy money won't seem so easy after all."
Thomas Demeo, the IRS Criminal Investigation special agent in charge of the Boston field office, struck a similar note, saying CARES Act funds "were created to help small businesses survive an unprecedented national crisis, not to bankroll personal debts, political ambitions, or real estate ventures."
DePena's office did not respond to a request for comment. He has not entered a public plea. The questions surrounding Democratic officials and their financial conduct continue to mount, from calls for DOJ probes into governors' ties to fraud cases to broader scrutiny of how elected leaders handle public money.
The timeline makes the alleged scheme especially brazen. DePena sat on the Lawrence City Council from 2016 to 2021, the very period during which he applied for and received the EIDL funds. He allegedly began diverting money to his campaign committee and personal accounts in the summer and fall of 2021, then won the mayoral election that November.
In other words, prosecutors allege DePena used taxpayer-backed emergency relief to help finance the campaign that put him in charge of a city of roughly 89,000 people. He won reelection in November 2025, meaning Lawrence voters returned him to office without knowing federal investigators were building a case against him.
The accountability questions extend beyond one Massachusetts mayor. Across the political landscape, voters are asking harder questions about how officials at every level accumulate wealth while in or adjacent to public office.
DePena now faces the prospect of up to 30 years in federal prison. His outstanding EIDL balance of $1.65 million remains unpaid. The tire shop that was supposed to justify the loan sits in the same city where DePena still holds the title of mayor, for now.
Meanwhile, the broader fight over government ethics and official misconduct shows no sign of cooling. Just recently, the Senate Ethics Committee weighed misconduct charges against another sitting Democrat, a reminder that public trust, once broken, is not easily rebuilt.
COVID relief was supposed to save small businesses from ruin. When the people entrusted with public office treat it as their personal credit line, the only thing left to do is what federal prosecutors did Friday morning, show up at the door.
