FBI agents with a bullhorn and battering ram arrested Lawrence, Massachusetts, Mayor Brian DePena at his home on federal wire fraud and money laundering charges, alleging he turned a pandemic relief loan into a personal and political slush fund.
DePena, 61, appeared in federal court in Boston on Friday afternoon after agents forced their way into his residence earlier that day. Prosecutors say the two-term mayor obtained a Small Business Administration disaster loan for his tire shop, Tenares Tire Services Inc., then requested several increases that ballooned the total to roughly $1.5 million, and spent the vast majority of it on expenses that had nothing to do with the business.
Only about $150,000 of the loan went toward the tire shop, federal prosecutors said. The rest, they allege, went to pay off high-interest mortgages on various properties, cover personal back taxes owed to the IRS, and bankroll DePena's successful 2021 run for mayor.
The charging documents paint a picture of a city councilman under financial pressure who saw pandemic relief money as a way out. DePena served on the Lawrence City Council from 2016 to 2021. Prosecutors allege that by 2021, his mayoral campaign was running short of cash, he owed back taxes, and he faced mounting pressure to repay high-interest loans on Lawrence properties.
So he allegedly turned to the SBA's Economic Injury Disaster Loan program, emergency funding Congress authorized to keep small businesses alive during the pandemic, and diverted the proceeds. More than $880,000 went to pay off personal mortgage debts. Roughly $90,000 landed in his campaign fund ahead of the November 2021 election. Fox News reported that DePena also wrote over $42,000 in checks to his own campaign committee and used $85,000 to settle personal tax debts with the IRS.
He won that election. He won reelection last November. And on Friday, the FBI came to his door.
Neighbors told the Washington Examiner and local station WCVB that agents announced themselves over a bullhorn before using a battering ram to enter the home. DePena was taken into custody without incident and transported to federal court in Boston for an initial appearance that afternoon.
U.S. Attorney Leah B. Foley did not hold back. In a statement after the arrest, she framed the case as a straightforward abuse of public office:
"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."
Foley added that the arrest was "just another example of our determination to root out fraud by anyone, even public officials, and holding elected officials accountable."
FBI Boston Division Special Agent in Charge Ted Docks was sharper still. He accused DePena of "cashing in on a public health crisis and blatantly defrauding a government program meant to keep businesses afloat during the pandemic."
In a written statement, the FBI said:
"When elected officials misuse federal funds for personal gain, they're breaking the trust of their constituents, and breaking the law. Together, with our partners, the FBI will continue to doggedly pursue anyone who defrauds the federal government."
The bureau's statement carried a warning aimed well beyond Lawrence: "You'll be prosecuted to the fullest extent of the law, and that 'easy money' won't seem so easy after all."
Thomas Demeo, head of the IRS Criminal Investigation Boston Field Office, told AP News that "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."
After his court appearance Friday afternoon, DePena was released under conditions. He surrendered his passport, he holds dual citizenship in the United States and the Dominican Republic, and agreed not to seek any loans without court approval.
Walking out of the courthouse, DePena beamed a wide smile for news cameras. His defense attorney, Carlos Apostle, repeatedly told reporters "no comment." When a journalist asked DePena directly whether he planned to resign, the mayor offered two words: "God bless." He said nothing else.
The New York Post reported that Apostle indicated DePena has no plans to step down despite the charges. The mayor's current status, whether he remains in office, has been suspended, or faces any local removal proceedings, remains unclear.
DePena faces one count of wire fraud, which carries a maximum sentence of 20 years in federal prison, three years of supervised release, and a fine of up to $250,000. The money laundering count adds a potential 10 more years, another three years of supervised release, and an additional $250,000 fine.
Fox News reported that DePena has made only $130,160 in payments on the loan, leaving an outstanding balance of approximately $1.65 million still owed to the SBA.
The SBA's Economic Injury Disaster Loan program was designed to provide emergency financial assistance to small businesses suffering losses during the pandemic. Qualified businesses could apply for low-interest federal loans to cover operating expenses they could not meet because of the economic shutdown. The program became one of the largest channels of pandemic relief, and one of the most heavily defrauded.
No other individuals have been named as co-conspirators in the case. Federal prosecutors have not indicated whether the investigation extends beyond DePena himself.
Several questions remain unanswered. Which specific Lawrence properties carried the high-interest mortgages allegedly paid off with loan money? Was the original $150,000 loan a single disbursement that DePena then inflated through repeated increase requests, or were there multiple separate applications? And how did a sitting city councilman obtain approval for repeated increases on a disaster loan for a tire shop without raising red flags at the SBA?
The CARES Act was supposed to be a lifeline for small businesses drowning in a crisis they did not create. If prosecutors are right, Brian DePena grabbed that lifeline, tied it to his campaign, and used it to pull himself into the mayor's office. The small businesses it was meant to save got nothing.
