Brian DePeña, the Mayor of Lawrence, Massachusetts, was arrested on Friday and charged with “one count of wire fraud and one count of money laundering,” according to a Justice Department announcement.
The press release states DePeña is accused of “fraudulently obtaining over $1.5 million in COVID small-business loans and using the proceeds to fund his campaign account, pay personal taxes, and pay off over $880,000 in high-interest, hard-money mortgages that encumbered various properties he owned in Lawrence.”
Video footage showed DePeña being arrested at his home early Friday morning. After an initial appearance in federal court in Boston on Friday afternoon, DePeña was released following a plea to comply with conditions including surrendering his passport and refraining from seeking loans without court approval. His lawyer, Carlos Apostle, repeatedly responded with “no comment” when questioned by media. When asked if he would resign, DePeña replied, “God bless.”
Prosecutors allege that in 2020 and 2021, DePeña obtained a government disaster loan for Tenares Tire Services Inc., a tire sales and automotive services business in Lawrence. During the pandemic, the Small Business Administration provided loans to qualified businesses facing financial losses. He initially used a $150,000 loan for the company but allegedly diverted $1.5 million from subsequent increases to cover personal campaign expenses, unpaid taxes, and high-interest mortgages on properties he owned.
According to a criminal complaint, by early 2021, DePeña had purchased a commercial property at 342 Broadway in Lawrence for $700,000 and owed $900,000 to private money lenders. He wrote his financial adviser that he “was in trouble” and needed immediate assistance with loan funds, stating, “I don’t have time to wait for this loan.” The complaint notes that on August 16, 2021, the EIDL funds were deposited into the Tenares Tires bank account.
Federal prosecutors allege DePeña did not intend to use the Tenares Tire EIDL funds solely as working capital during the pandemic crisis but instead used $85,000 in August 2021 for personal tax liabilities and an additional $90,000 in September 2021 for his mayoral campaign.
United States Attorney Leah B. Foley stated: “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.” Thomas Demeo, Special Agent in Charge of the Internal Revenue Service Criminal Investigation, Boston Field Office, added: “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.”
