Lawrence Mayor Brian DePeña Arrested for $1.5M COVID Loan Fraud

Lawrence Mayor Brian DePeña was arrested by the FBI on wire fraud and money laundering charges over alleged misuse of $1.5M in COVID loans. Read the full story.

Lawrence Mayor Brian DePeña was taken into custody by the FBI early Friday morning and charged with wire fraud and money laundering. Prosecutors allege he diverted more than $1.5 million in federal COVID-era small business loans from his tire company to personal taxes, campaign expenses, and high-interest property debts.

The 61-year-old Democrat, first elected in 2021 and reelected in 2025, owns Tenares Tire Services Inc. in Lawrence, Massachusetts. According to a criminal complaint unsealed by the U.S. Attorney’s Office for the District of Massachusetts, DePeña applied for Economic Injury Disaster Loans through the Small Business Administration in 2020 and 2021. These low-interest loans, typically around 3.75 percent, were designed solely as working capital to help small businesses weather pandemic-related economic harm.

Federal authorities say an initial loan of roughly $150,000 was largely used for legitimate business needs. Later increases pushed the total to approximately $1.65 million. Prosecutors claim substantial portions were then redirected. Roughly $85,000 allegedly covered personal IRS tax liabilities. About $90,000 supported contributions or payments to his mayoral campaign committee. Nearly $883,000 went toward paying off high-interest private mortgages on properties he owned in the city, often through treasurer’s checks.

By early August 2026, records showed only about 16 payments totaling roughly $130,000 had been made on the outstanding loan, most applied to interest. The principal balance remained near the expanded amount.

Official Statements on the Arrest

U.S. Attorney Leah B. Foley addressed the case directly. “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,” Foley said. “Today’s arrest is just another example of our determination to root out fraud by anyone, even public officials and holding elected officials accountable.”

FBI Special Agent in Charge Ted E. Docks of the Boston Division described the allegations in strong terms. He accused DePeña of “cashing in on a public health crisis and blatantly defrauding a government program meant to keep businesses afloat during the pandemic.” Investigators portrayed the loans as having been treated like a personal source of funds rather than emergency relief.

Background on the Loans and Alleged Misuse

The Economic Injury Disaster Loan program formed part of the federal response to COVID-19. Eligible businesses could receive financing restricted to working capital needs caused by the pandemic. DePeña’s company first received approval for $150,000 in mid-2020.

By early 2021, according to the complaint, personal and political pressures mounted. His mayoral campaign faced financial strain. He owed back taxes to the IRS. He also carried nearly $900,000 in high-interest private loans, sometimes called hard-money mortgages, on Lawrence real estate. These carried rates far above the federal disaster loan rate.

Prosecutors say DePeña sought successive increases. One added $350,000. A later modification brought the total near $1.65 million. Authorities contend he signed certifications affirming the funds would be used only for approved business purposes. They argue the Small Business Administration would not have approved the expansions had it known of the intended personal and political uses.

Some of the alleged transfers occurred after DePeña took office in late 2021. Bank records, loan applications, and tracing of transfers form the core of the government’s case. Investigators from the FBI, IRS Criminal Investigation, and the Massachusetts Inspector General’s office participated.

Legal Charges and Next Steps

DePeña faces one count of wire fraud and one count of money laundering. Wire fraud carries a potential maximum of 20 years in prison. Money laundering carries up to 10 years. Fines and supervised release are also possible. He was scheduled for an initial appearance in Boston federal court on Friday.

Like all defendants, he is presumed innocent unless proven guilty in a court of law. No public statement from DePeña or a defense attorney was immediately available at the time of the arrest announcement.

Impact on Lawrence City Government

The arrest raises questions about leadership continuity in Lawrence, a city of roughly 90,000 residents about 30 miles north of Boston. DePeña previously served on the Lawrence City Council from 2016 to 2021. City officials and residents now face uncertainty about governance while the federal case proceeds.

This development follows earlier scrutiny this year involving a separate state investigation into alleged secret audio recording of conversations near his City Hall office. DePeña denied knowledge of the recording at the time.

The case fits into a broader national pattern of federal prosecutions targeting misuse of pandemic relief funds. Thousands of cases have been brought across the country as authorities continue to review applications and expenditures years after the height of the crisis.

Broader Context of Pandemic Relief Fraud

Federal agencies have recovered significant sums and secured numerous convictions related to Paycheck Protection Program and Economic Injury Disaster Loan fraud. Officials repeatedly emphasize that these programs were intended as a safety net for legitimate businesses, not personal or political vehicles.

In DePeña’s case, prosecutors highlight the disparity between the low federal interest rate and the high-interest private debt he allegedly retired with the proceeds. They also note the limited repayments made on the federal loan itself.

As the matter moves through the federal court system, attention will focus on whether DePeña contests the charges, any potential plea discussions, and the practical effects on day-to-day city operations in Lawrence.

Frequently Asked Questions

What charges does Brian DePeña face? He is charged with one count of wire fraud and one count of money laundering related to the alleged misuse of Economic Injury Disaster Loans.

How much money is involved? Prosecutors allege more than $1.5 million in federal COVID-era small business loans, with the total reaching approximately $1.65 million after increases.

What was the money allegedly used for? Authorities claim funds went toward personal IRS tax payments, contributions to his mayoral campaign committee, and payoffs of high-interest mortgages on properties he owned.

When did the alleged misuse occur? The loans were obtained in 2020 and 2021. Some alleged diversions happened after DePeña became mayor in late 2021.

What is the potential penalty? Wire fraud carries up to 20 years in prison. Money laundering carries up to 10 years, plus possible fines and supervised release.

Has DePeña commented on the charges? No public statement from the mayor or defense counsel was available immediately after the arrest announcement.

What happens next in the case? DePeña was scheduled for an initial court appearance in Boston federal court on Friday. Further proceedings will follow standard federal criminal process.

How does this affect Lawrence city government? The arrest creates questions about leadership continuity. City officials will need to address operational and governance matters while the case advances.

The federal arrest of Lawrence Mayor Brian DePeña marks a significant development in ongoing efforts to enforce the rules governing pandemic relief programs. Prosecutors allege a clear diversion of restricted funds for personal and political purposes. The mayor, who rose from the City Council to two terms in the top office, now faces serious charges that carry substantial prison exposure.

As the legal process unfolds in Boston, residents of Lawrence and observers across Massachusetts will watch closely for updates on both the criminal case and the practical implications for local government. The matter underscores the expectation that public officials who operate private businesses must maintain strict separation between those roles, especially when handling taxpayer-supported emergency aid.