Lawrence Mayor Charged with Fraud for Misuse of COVID-19 Loan

Authorities Detail the Fraudulent Activities of Mayor DePena

BOSTON, Massachusetts, United States of America — Lawrence Mayor Brian DePena was arrested on Friday, facing serious allegations of fraud related to a COVID-19 pandemic loan. DePena has been charged with one count of wire fraud and one count of money laundering in connection with the misuse of a $1.5 million small-business loan intended to support his tire sales business.

Authorities claim that instead of using the loan to benefit Tenares Tire Services Inc., DePena diverted funds for personal use, including covering high-interest mortgages and bolstering his mayoral election campaign. The mayor, who has held office since 2021 after serving on the Lawrence City Council, allegedly funneled more than $880,000 to pay off multiple business debts and redirected around $90,000 into his campaign for reelection, scheduled for 2021.

Ted Docks, special agent in charge of the FBI’s Boston Division, condemned DePena’s actions, asserting that he exploited a public health crisis to enrich himself at the expense of federal aid programs designed to support struggling businesses. “When elected officials misuse federal funds for personal gain, they’re breaking the trust of their constituents — and breaking the law,” Docks stated.

Background on the Loan and Fraudulent Claims

DePena acquired the initial government disaster loan of $150,000 to assist his tire business during the financial turmoil induced by the pandemic. The federal Small Business Administration had rolled out loans to eligible companies facing economic challenges during this period. Subsequently, DePena requested several increases on the original loan, ultimately leading to the alleged fraudulent claim of $1.5 million.

In the wake of the allegations, the FBI revealed that DePena’s campaign finances faced significant strain leading up to the election, coupled with overdue taxes and high-interest debts tied to his properties in Lawrence. Prosecutors argue that DePena's fraudulent activities were not only a breach of legal and ethical guidelines but also a stark betrayal of public trust.

Possible Legal Consequences for DePena

If found guilty of wire fraud, DePena faces substantial legal repercussions, including up to 20 years in prison, three years of supervised release, and a potential fine of $250,000. The charge of money laundering could result in an additional sentence of up to 10 years in prison, alongside similar fines and supervised release terms.

At present, DePena, along with his spokesperson and chief of staff, have not publicly commented on the charges. He is scheduled for arraignment later this Friday.

The investigation is ongoing, and the FBI has reaffirmed its commitment to holding public officials accountable when they misuse federal funds.