NEW: Democrat Mayor Arrested In Connection With $1.5 Million Fraud Scheme

Mayor Brian DePeña of Lawrence, Massachusetts was arrested and charged Friday with one count of wire fraud and one count of money laundering in connection with allegations that he fraudulently obtained more than $1.5 million in COVID-19-related small business loans and diverted the proceeds for personal and campaign purposes.

According to a press release from the U.S. Attorney’s Office for the District of Massachusetts, DePeña, 61, who was elected mayor of Lawrence in November 2021 and reelected in November 2025, previously served on the Lawrence City Council from 2016 to 2021. He owns Tenares Tire Services Inc., a tire sales and automotive services business in Lawrence.

Prosecutors allege that in 2020 and 2021 he applied for Economic Injury Disaster Loans (EIDLs) from the U.S. Small Business Administration on behalf of that business. These loans, offered during the pandemic to eligible small businesses experiencing substantial financial disruptions, carried an interest rate of 3.75 percent and were restricted to use as working capital to alleviate economic injury caused by COVID-19. Working capital, according to the charging documents, did not include funding a political campaign, paying personal taxes, or paying off mortgages.

The charging documents state that DePeña caused Tenares Tire to apply for and obtain an initial EIDL of $150,000 in June 2020 and used the majority of those funds as working capital for the business. By early 2021, however, prosecutors allege he needed additional cash because his mayoral campaign was struggling to pay bills, he owed the IRS for back taxes, and he owed nearly $900,000 to two private hard-money lenders charging 12 percent and 8 percent interest on loans secured by various properties he owned in Lawrence.

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BREAKING: Lawrence Mayor DePeña (D) in MA arrested for stealing $1.6M from Covid funds

He now faces 30 years in prison pic.twitter.com/7C9uFu3XJO

— End Wokeness (@EndWokeness) August 14, 2026

In April 2021, DePeña allegedly requested an increase to the Tenares Tire EIDL. On July 14, 2021, the SBA approved an increase of $350,000, bringing the total loan to $500,000. The funds were electronically deposited into the Tenares Tire bank account on August 16, 2021; the pre-deposit balance in the account was $20.23. Shortly thereafter, according to the documents, DePeña paid $85,000 of the EIDL funds to the IRS to satisfy personal tax debts.

He also transferred $120,000 of the funds to a personal account and used that money to write checks totaling $90,000 to “The Committee to Elect Brian Depena.” These checks were deposited into the campaign account and characterized as loans to the campaign in September and October 2021.

While the high-interest loans remained outstanding and the campaign continued to face financial difficulties, DePeña allegedly requested a second EIDL modification in October 2021. On October 27, 2021, the SBA approved an increase of $1,154,400, bringing the total Tenares Tire EIDL to $1,654,400. On November 30, 2021, approximately $1,154,188 in EIDL funds were deposited into the Tenares Tire account, and DePeña allegedly transferred the entire amount the same day to one of his personal accounts, which had a prior balance of $1,401.

Prosecutors allege he then used $42,112.96 of those funds for his mayoral campaign by writing checks for $10,000 and $32,112.96. The first check was deposited on December 2, 2021, when the campaign account had been overdrawn for approximately 20 days. In addition, DePeña allegedly used $883,293 of the EIDL funds to pay off the hard-money loans: on December 9, 2021, he purchased a treasurer’s check for $538,109.03 to satisfy one loan, and on December 18, 2021, he purchased a treasurer’s check for $345,184.13 to satisfy the other.

As of August 5, 2026, according to the charging documents, DePeña had made only 16 payments on the Tenares Tire EIDL, totaling approximately $130,160, all of which were applied to accrued interest. The outstanding principal balance was approximately $1,654,420.

“Mayor DePena 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. Today’s arrest is just another example of our determination to root out fraud by anyone, even public officials and holding elected officials accountable,” U.S. Attorney Leah Foley said in a statement.

DePeña appeared in federal court in Boston on Friday, August 14, and was released under conditions that included surrendering his passport, reporting to probation, remaining in Massachusetts, and not applying for loans without court approval.

If convicted, the wire fraud charge carries a maximum sentence of up to 20 years in prison, up to three years of supervised release, and a fine of up to $250,000. The money laundering charge carries a maximum of up to 10 years in prison, three years of supervised release, and a fine of up to $250,000. Sentences are determined by a federal district court judge based on the U.S. Sentencing Guidelines and applicable statutes.

An attorney for the mayor indicated that his client has no intention to resign while the case plays out.

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