The Democratic mayor of Lawrence, Massachusetts allegedly stole $1.5 million in pandemic relief loans — then spent it on his political campaign, personal taxes, and luxury mortgages.
Brian DePeña, 61, was arrested Friday on wire fraud and money laundering charges after federal investigators say he funneled taxpayer-funded small-business loans into his own pockets instead of the tire shop he claimed needed救助.
The case marks yet another high-profile example of alleged abuse within federal pandemic relief programs, which distributed trillions of dollars with minimal vetting during the height of the COVID-19 crisis. As the nation’s economy ground to a halt in 2020, Congress authorized sweeping emergency aid packages designed to keep small businesses afloat and workers employed. But the speed at which those funds were deployed left the programs vulnerable to exploitation.
The DOJ alleges DePeña applied for Economic Injury Disaster Loans in 2020 and 2021 for Tenares Tire Services Inc., a Lawrence-based tire sales and automotive business he owned. The EIDL program was created to help businesses recover from the pandemic’s economic fallout.
Economic Injury Disaster Loans were a critical component of the federal government’s response to the economic devastation caused by pandemic lockdowns and consumer spending freezes. The program, administered by the Small Business Administration, provided low-interest loans to businesses experiencing substantial economic injury. Applicants were required to certify that the funds would be used exclusively for working capital purposes — covering payroll, rent, utilities, and other operational expenses necessary to keep their businesses running.
DePeña allegedly used the funds to pay off more than $880,000 in high-interest mortgages, fund his campaign account, and cover personal tax bills — none of which qualify as working capital under federal loan rules.
The alleged misuse represents a stark violation of the program’s terms. Federal law requires EIDL recipients to use loan proceeds only for legitimate business expenses that were incurred as a direct result of the disaster — in this case, the economic disruption caused by COVID-19. Personal expenses, political contributions, and real estate transactions fall well outside those boundaries.
“Mayor DePeña 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.”
U.S. Attorney Leah Foley made the statement clear: the DOJ is committed to rooting out fraud by anyone — even elected officials.
Lawrence, a working-class city of roughly 90,000 residents located about 30 miles north of Boston, has a history of economic challenges. The city’s median household income falls well below the state average, making the alleged theft of federal aid designed to help struggling businesses particularly significant for the community. DePeña’s position as mayor would have given him both knowledge of available relief programs and a public platform that may have lent credibility to his applications.
FBI Boston and IRS Criminal Investigation special agents arrested DePeña Friday morning. He appeared in federal court later that day.
🚨BREAKING: #FBI Boston & @IRS_CI special agents have arrested Mayor Brian DePena, of Lawrence, MA, for allegedly fraudulently obtaining over $1.5 million in #COVID19@SBAgov loans, & using the proceeds to fund his campaign account, pay his personal taxes, & pay off $883,000 in… pic.twitter.com/lYUSIMPhSZ
— FBI Boston (@FBIBoston) August 14, 2026
Thomas Demeo, Special Agent in Charge of IRS Criminal Investigation’s Boston Field Office, said the arrest highlights federal commitment to protecting emergency relief programs.
“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,” Demeo said in a statement.
The involvement of IRS Criminal Investigation underscores the financial nature of the alleged crimes. Wire fraud and money laundering charges carry substantial potential penalties, including years of federal prison time and significant fines. Wire fraud alone carries a maximum sentence of 20 years in prison, while money laundering can add additional years depending on the amount involved.
When reporters asked whether DePeña plans to resign, his attorney replied: “No, he’s done a great job in Lawrence.”
The attorney’s response raises questions about whether DePeña intends to continue serving as mayor while facing federal criminal charges. Massachusetts law does not automatically remove elected officials from office upon indictment, though conviction on federal felony charges would trigger removal.
Friday’s charges come after years of pandemic-era relief programs being targeted by fraudsters nationwide. Experts have long warned that PPP and EIDL loans were riddled with abuse due to rushed rollout and limited oversight.
Federal agencies have been working to identify and prosecute fraudulent claims across multiple pandemic relief programs. The Justice Department has brought thousands of cases related to COVID-19 relief fraud, recovering billions of dollars in stolen funds. However, investigators acknowledge that the full scope of fraud may never be completely known due to the sheer volume of applications processed and the limitations of retrospective enforcement.
The charges remain allegations. The case has not been proven in court.
