A Massachusetts mayor was arrested Friday on federal charges accusing him of fraudulently obtaining more than $1.5 million in COVID-era relief funds and diverting some of the money toward his political campaign and other expenses.
Lawrence Mayor Brian DePeña, 61, was charged with one count of wire fraud and one count of money laundering in connection with funds obtained through a federal disaster loan program, according to authorities.
Federal prosecutors allege DePeña obtained the money for Tenares Tire Services Inc., his tire sales and automotive services business in Lawrence, but later used substantial portions for purposes unrelated to the company.
The allegations include more than $880,000 allegedly used to pay off high-interest mortgages connected to various businesses and $90,000 allegedly transferred to DePeña’s mayoral campaign ahead of the 2021 election.
DePeña has not been convicted of either charge.
His arrest unfolded Friday morning at his home, where neighbors told WCVB they awoke to FBI agents using a bullhorn outside the property.
Agents subsequently used a battering ram to enter the home, according to the outlet.
DePeña appeared in federal court in Boston later Friday and was released subject to several conditions, including surrendering his passport and agreeing not to seek loans without court approval.
His attorney, Carlos Apostle, repeatedly responded “no comment” when questioned by reporters outside the courthouse.
DePeña smiled as he left the building and responded “God bless” when asked whether he planned to resign, according to the Daily Mail.
The case centers on government assistance DePeña received for his business during the COVID-19 pandemic.
The Small Business Administration offered disaster loans to qualifying businesses suffering financial losses during the pandemic.
DePeña initially obtained a $150,000 loan for Tenares Tire Services in 2020, according to prosecutors.
Authorities allege his financial situation changed by the following year as he pursued the Lawrence mayor’s office.
Prosecutors said DePeña’s campaign was running low on money while he also owed back taxes and faced pressure from high-interest loans associated with several Lawrence properties.
He subsequently requested multiple increases to the government loan.
Federal authorities allege approximately $1.5 million from those increases was ultimately directed toward expenses unrelated to the tire business.
Among the most politically significant allegations is prosecutors’ claim that DePeña transferred $90,000 of the funds into his mayoral campaign.
DePeña went on to win the November 2021 election.
He had previously served on the Lawrence City Council from 2016 until becoming mayor and was reelected to the mayor’s office last November.
Federal law enforcement officials issued sharp statements following his arrest, per the Daily Mail.
Ted Docks, special agent in charge of the FBI’s Boston Division, accused DePeña 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,” the FBI said in a statement.
“Together, with our partners, the FBI will continue to doggedly pursue anyone who defrauds the federal government.”
U.S. Attorney Leah Foley similarly accused the mayor of violating the trust placed in him by Lawrence residents.
“Mayor DePena was elected to be a leader for the City of Lawrence,” Foley said.
“He was looked up to and trusted by his constituents, but he betrayed that trust through his alleged corruption and lies.”
Foley said the arrest demonstrated federal authorities’ commitment to “root out fraud by anyone, even public officials and holding elected officials accountable.”
DePeña faces significant potential prison time if convicted.
The wire fraud count carries a maximum sentence of 20 years in prison, up to three years of supervised release and a fine of as much as $250,000.
The money laundering count carries a maximum of 10 years behind bars, up to three years of supervised release and a potential $250,000 fine.
