Mayor Brian Depena charged in $1.65M EIDL fraud case

Massachusetts Mayor Arrested in COVID Loan Fraud Case

The mayor of Lawrence, Massachusetts has been arrested and charged in federal court over an alleged pandemic loan fraud scheme involving more than $1.5 million in COVID small business funds.

Federal prosecutors say Brian DePena, 61, fraudulently obtained Economic Injury Disaster Loan funds through Tenares Tire Services Inc., a tire sales and automotive services business he owned in Lawrence. DePena was elected mayor in November 2021 and reelected in November 2025, after previously serving on the Lawrence City Council.

According to the U.S. Attorney’s Office for the District of Massachusetts, DePena is charged with one count of wire fraud and one count of money laundering.

What Prosecutors Allege

The government says DePena used COVID relief funds for purposes that were not allowed under the EIDL program.

EIDL funds were intended to help eligible small businesses deal with economic injury caused by the pandemic. Prosecutors say those funds were not supposed to be used to finance a political campaign, pay personal tax debts, or pay off private real estate loans.

According to charging documents summarized by DOJ, DePena first caused Tenares Tire to obtain a $150,000 EIDL in June 2020. He later sought increases to that loan. In July 2021, the SBA approved an additional $350,000, bringing the total loan to $500,000. Prosecutors allege DePena then used part of the money to pay personal IRS debt and fund his mayoral campaign.

The government says a second modification was approved in October 2021, increasing the loan by about $1.15 million and bringing the total Tenares Tire EIDL to roughly $1.65 million. Prosecutors allege DePena transferred the full amount of that later disbursement into a personal account the same day it arrived.

Campaign Funds, Taxes and Hard-Money Loans

The most notable part of the allegation is how the money was allegedly used.

Prosecutors say DePena used EIDL funds to:

• Pay $85,000 toward personal tax debts.

• Transfer funds into his personal account.

• Write checks totaling more than $130,000 to his mayoral campaign.

• Pay off about $883,000 in high-interest hard-money mortgage debt tied to properties he owned in Lawrence.

The DOJ release says the private hard-money loans carried interest rates of 12% and 8%, compared with the EIDL rate of 3.75%.

That detail is important because prosecutors are framing the case as more than misuse of business funds. They are alleging that low-cost emergency capital meant for a small business was redirected to personal obligations, campaign activity, and real estate debt.

A Public Official, a Pandemic Program and a Familiar Pattern

COVID loan fraud cases have continued for years, but this one stands out because the defendant is a sitting mayor.

Federal investigators have repeatedly argued that pandemic relief programs were created to help businesses survive, not to serve as personal financing tools. In this case, the government alleges that a public official used emergency small business relief as what the FBI described as a personal “slush fund.”

The case also fits a broader enforcement pattern: prosecutors are still working through COVID-era loan files long after the programs ended. The timeline here stretches back to 2020 and 2021, while the arrest and charges were announced on August 14, 2026.

Presumption of Innocence

DePena has been charged, not convicted.

The DOJ specifically notes that the details in the charging documents are allegations and that DePena is presumed innocent unless and until proven guilty beyond a reasonable doubt in court.

If convicted, wire fraud carries a potential sentence of up to 20 years in prison, while money laundering carries a potential sentence of up to 10 years in prison.