Mayor Brian DePena of Lawrence, Massachusetts, was arrested Friday on federal charges that he fraudulently obtained more than $1.5 million in COVID-19 small-business loans and diverted the money to his political campaign and personal debts.
DePena, 61, was charged with one count of wire fraud and one count of money laundering, the U.S. Attorney’s Office for the District of Massachusetts announced. He was expected to make an initial appearance in federal court in Boston later Friday.
Federal prosecutors allege DePena obtained the money through the Small Business Administration’s Economic Injury Disaster Loan program for Tenares Tire Services, a tire sales and automotive services business he owned in Lawrence. The pandemic-era program offered low-interest loans to businesses suffering economic disruptions, with funds generally restricted to working capital and other eligible business expenses.
DePena initially obtained a $150,000 loan in June 2020 and used most of it for legitimate business expenses, according to prosecutors. But authorities allege his financial circumstances had changed by the following year, as he faced a personal tax debt of nearly $900,000 in high-interest private mortgages and mounting expenses associated with his campaign for mayor.
In 2021, DePena allegedly sought out and received multiple increases to the federal loan. After $350,000 was deposited into his business account in August of that year, prosecutors say he used $85,000 to pay personal IRS debts and transferred $120,000 into a personal account. He allegedly then wrote $90,000 in checks to his mayoral campaign, characterizing them as campaign loans.
The SBA later approved another increase that brought the total loan to more than $1.65 million. Prosecutors allege DePena transferred more than $1.15 trillion from that disbursement into a personal account and used portions of the money for his campaign and to pay off private debts.
Authorities allege DePena ultimately used $883,000 in federal loan proceeds to pay off two high-interest mortgages tied to properties he owned in Lawrence. As of Aug. 5, prosecutors said the loan still carried an outstanding balance of approximately $1.65 million.
“This was emergency financial assistance meant to be a safety net for struggling businesses, not Mr. Depena’s own personal ATM,” said Ted Docks, Special Agent in Charge of the FBI’s Boston Division. “When elected officials misuse federal funds for personal gain, they’re breaking the trust of their constituents – and breaking the law.”
WHITE HOUSE LAUNCHED FRAUD.GOV TO TRACK FRAUD CASES
DePena was elected mayor in November 2021 and reelected in 2025 after previously serving on the Lawrence City Council from 2016 to 2021.
The wire fraud charges carry a maximum sentence of 20 years in prison, while the money laundering charges carry up to 10 years.