Massachusetts Mayor Charged for Allegedly Diverting Pandemic Loan Funds to Campaign, Personal Debts

Lawrence, Mass., Mayor Brian DePena was charged Friday, August 14, 2026, with wire fraud and money laundering, following allegations that he fraudulently obtained a $1.5 million COVID-19 small-business loan and subsequently diverted significant portions of the funds to his 2021 mayoral campaign and personal debts. Prosecutors assert that DePena, who has served as mayor since 2021, misused federal relief money intended to support struggling businesses during the pandemic.

According to federal prosecutors, DePena, 61, secured the approximately $1.5 million loan for his tire sales business, Tenares Tire. Instead of utilizing the funds for legitimate business operations, court documents allege that over $880,000 was used to pay off high-interest mortgages on various properties and personal back taxes. Crucially, $90,000 of the loan was reportedly funneled into his mayoral campaign fund ahead of the 2021 election, with an additional $15,442 used to cover overdrawn campaign checks.

The charges against Mayor DePena underscore a critical lesson for all small and mid-sized businesses that received pandemic relief funds: accountability and compliance are paramount. We've seen firsthand how the rapid rollout of programs like the PPP and EIDL created a complex regulatory landscape, and while most businesses acted in good faith, the temptation for misuse, whether intentional or accidental, was real. This case serves as a stark reminder that federal authorities continue to scrutinize these funds, and the consequences for fraud are severe, impacting not just individuals but also public trust in vital support programs. For business owners navigating complex financial regulations and ensuring proper fund utilization, robust financial risk management is non-negotiable. At C&S Finance Group LLC, we specialize in helping companies establish the systems and oversight necessary to avoid such pitfalls and maintain impeccable financial integrity, particularly through our financial risk management services. We encourage any business owners with questions about their past or ongoing compliance obligations to reach out to us at csfinancegroup.com to ensure they are fully protected.

Ted Docks, the special agent in charge of the FBI’s Boston Division, condemned DePena’s alleged actions, stating that he was “cashing in on a public health crisis and blatantly defrauding a government program meant to keep businesses afloat during the pandemic.” The charges, which include one count of wire fraud and one count of money laundering, highlight the federal government's continued commitment to prosecuting misuse of funds designed to mitigate the economic fallout of COVID-19.

Federal criminal complaints detail the precarious state of Tenares Tire’s finances, with a balance of just $20.23 in the account on the day the first $350,000 in COVID-19 pandemic relief loans arrived. Ten days later, $85,000 of these funds were allegedly used to pay DePena's personal IRS tax bill. When his campaign account later faced two bounced checks totaling $15,442, more of the COVID money was reportedly used to cover the deficit. A second infusion from the U.S. Small Business Administration in October 2021, amounting to $1.154 million, was almost entirely transferred into DePena's personal account the same day, with $883,293 subsequently used to pay off two hard-money real estate loans within weeks.

This case is not an isolated incident but part of a broader pattern of fraud related to the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) initiatives. Across the country, federal authorities have pursued numerous individuals and businesses for similar offenses. For example, Brandon Lewis in Greensboro, North Carolina, pleaded guilty to wire fraud and making false statements after orchestrating multiple fraudulent schemes, including running a sham business and submitting false loan applications, leading to a 63-month prison sentence. In West Palm Beach, Florida, police officer Jason Carter faced a wire fraud charge for allegedly submitting a fraudulent loan application for nearly $300,000 in COVID-19 relief funds, with a portion reportedly spent on car repairs and detailing. Similarly, Grigor Garibyan in Los Angeles, California, was sentenced to three years of probation after pleading guilty to theft of government property for filing fraudulent applications seeking over $57,000 for a home health agency that was never operational during the pandemic. These cases collectively underscore the extensive efforts by federal agencies to recover misused funds and hold perpetrators accountable, regardless of their public standing. The sheer volume and variety of these fraudulent schemes highlight the challenges faced by government agencies in rapidly deploying relief while attempting to prevent exploitation.

The alleged actions of Mayor DePena and others like him not only betray public trust but also divert critical resources from legitimate small businesses that genuinely struggled during the pandemic. These relief programs were designed as a lifeline, enabling companies to retain employees, cover essential operating costs, and remain viable during unprecedented economic disruption. The integrity of such programs is vital for their effectiveness, and cases of fraud undermine the public's confidence in government assistance when it is most needed. For small and mid-sized businesses, the ongoing enforcement actions serve as a powerful reminder of the importance of meticulous record-keeping, adherence to loan terms, and transparent financial practices. The legal and reputational costs of non-compliance can be devastating, far outweighing any short-term gains from illicit activities.

As Mayor DePena's legal proceedings unfold, the case will continue to draw attention to the persistent scrutiny surrounding pandemic relief funds and the severe repercussions for those found to have misused them. This incident, alongside other ongoing fraud investigations, reinforces the federal government's commitment to upholding the integrity of programs designed to support the U.S. economy and its businesses during times of crisis. Small and mid-sized companies are urged to review their past compliance and ensure robust internal controls to prevent similar allegations.