Lawrence Mayor Brian DePeña Faces Federal Charges Over Alleged COVID Loan Misuse
Lawrence, Massachusetts, Mayor Brian DePeña has been arrested and charged with federal wire fraud and money laundering in connection with allegations that more than $1.5 million in COVID-19 relief loans were improperly diverted for personal and campaign-related expenses.
According to the U.S. Attorney’s Office for the District of Massachusetts, DePeña, 61, was arrested Friday and appeared in federal court in Boston on August 14, 2026. Prosecutors allege that he obtained Economic Injury Disaster Loans, or EIDLs, through the U.S. Small Business Administration for his Lawrence-based business, Tenares Tire Services Inc.
The federal case centers on allegations that money intended to help a small business recover from pandemic-related economic disruption was instead used for expenses that prosecutors say were unrelated to eligible business purposes.
DePeña was elected mayor of Lawrence in November 2021 and was reelected in November 2025. Before becoming mayor, he served on the Lawrence City Council from 2016 through 2021.
Federal Investigation Focuses on More Than $1.5 Million in COVID Loans
Prosecutors allege that DePeña applied for EIDL assistance in 2020 and 2021 on behalf of Tenares Tire Services.
The federal pandemic-relief program was designed to provide working capital to eligible businesses experiencing substantial financial harm because of COVID-19. The loans generally carried a 3.75% interest rate and were subject to restrictions governing how the funds could be used.
According to the charging documents, eligible working-capital expenses did not include political campaign spending, personal tax obligations or repayment of certain personal debts.
The case alleges that DePeña initially obtained a $150,000 EIDL in June 2020. Prosecutors say most of that initial loan was used for business working capital.
The allegations become more significant in 2021, when prosecutors say DePeña sought additional funding while facing campaign expenses, personal tax liabilities and substantial private debts.
Alleged $500,000 Loan Increase
In April 2021, DePeña allegedly requested an increase to the Tenares Tire EIDL.
The SBA approved an additional $350,000 on July 14, 2021, increasing the total loan amount to $500,000.
The funds were deposited into the company’s bank account on August 16, 2021. Prosecutors say the account had contained only $20.23 immediately before the deposit.
Federal authorities allege that DePeña subsequently used portions of the loan for purposes unrelated to the tire business.
According to the charging documents, approximately $85,000 was paid to the IRS to satisfy personal tax obligations.
Prosecutors also allege that DePeña transferred $120,000 from the business account to a personal account and then used $90,000 to write campaign checks payable to The Committee to Elect Brian DePeña.
Those checks were deposited into the campaign account and characterized as loans to the campaign in September and October 2021, according to prosecutors.
Prosecutors Allege Second Major Loan Increase
The federal allegations describe another substantial increase later in 2021.
In October, while the campaign was allegedly experiencing financial difficulties and private loans remained outstanding, DePeña requested another modification to the EIDL.
On October 27, 2021, the SBA allegedly approved an increase of $1,154,400, bringing the total Tenares Tire EIDL to approximately $1.65 million.
On November 30, 2021, approximately $1,154,188 was deposited into the Tenares Tire account, according to the charging documents.
Prosecutors allege that DePeña transferred the entire amount to a personal bank account the same day. That personal account reportedly had a balance of approximately $1,401 before the transfer.
Alleged Campaign Spending and Debt Payments
Federal prosecutors allege that some of the newly obtained funds were subsequently used to support DePeña’s mayoral campaign.
According to the charging documents, he wrote campaign checks totaling $42,112.96.
One check for $10,000 was allegedly deposited into the campaign account on December 2, 2021, when the campaign account had reportedly been overdrawn for about 20 days.
Prosecutors also allege that a much larger portion of the loan proceeds was used to repay private hard-money loans.
The charging documents say DePeña used approximately $883,293 in EIDL funds to pay off two such loans.
On December 9, 2021, prosecutors allege that he obtained a treasurer’s check for $538,109.03 to satisfy one loan.
On December 18, 2021, another treasurer’s check totaling $345,184.13 was allegedly used to satisfy the second loan.
The federal government contends that these transactions involved money that was supposed to support the business rather than personal financial obligations.
EIDL Balance Remains a Major Issue
The charging documents also address the status of the Tenares Tire loan.
As of August 5, 2026, prosecutors say DePeña had made only 16 payments on the EIDL, totaling approximately $130,160.
According to the government, those payments were applied entirely to accrued interest.
The outstanding principal balance was approximately $1,654,420, according to the charging documents.
The allegations do not constitute a conviction. DePeña is presumed innocent unless and until proven guilty in court.
U.S. Attorney Says Officials Must Be Held Accountable
U.S. Attorney Leah Foley said the allegations represented a serious breach of public trust.
In a statement released after the arrest, Foley said DePeña was elected to serve as a leader for Lawrence and alleged that he betrayed the trust of constituents through corruption and false statements.
Federal authorities emphasized that the investigation reflects the government’s broader effort to pursue alleged fraud involving pandemic-relief programs, including cases involving public officials.
Mayor Released Under Court Conditions
Following his appearance in federal court in Boston on August 14, DePeña was released under conditions imposed by the court.
Those conditions include surrendering his passport, reporting to probation authorities and remaining in Massachusetts.
He is also prohibited from applying for loans without court approval.
The restrictions will remain part of the federal case as the legal proceedings move forward.
What the Federal Charges Mean
DePeña faces one count of wire fraud and one count of money laundering.
A wire fraud conviction can carry a maximum sentence of up to 20 years in federal prison, along with up to three years of supervised release and a fine of as much as $250,000.
The money laundering charge carries a maximum potential sentence of up to 10 years in prison, up to three years of supervised release and a fine of up to $250,000.
Those figures represent statutory maximum penalties rather than a prediction of what sentence, if any, DePeña would receive.
Any sentence would be determined by a federal district court judge after considering the applicable laws and U.S. Sentencing Guidelines.
Mayor’s Attorney Says He Does Not Plan to Resign
An attorney representing DePeña has indicated that the mayor does not intend to resign while the federal case proceeds.
That means the legal proceedings could continue while DePeña remains in office, potentially placing the case under continued public and political scrutiny in Lawrence.
The allegations are now expected to move through the federal court process, where prosecutors will have to prove the charges beyond a reasonable doubt.
What Happens Next in the Case?
The federal prosecution will continue through the court system, with future proceedings determining how the allegations develop.
The government’s accusations are based on charging documents and financial transactions that prosecutors say demonstrate the improper use of COVID-era business loans.
DePeña will have the opportunity to contest the allegations and present a defense in federal court.
For residents of Lawrence, the case could also raise broader questions about public accountability, campaign financing and the administration of pandemic-relief programs.
For now, however, the criminal charges remain allegations, and the mayor retains the presumption of innocence unless a court determines otherwise.
Benjamin Harris is a RapidReports front page contributor and editor,proud father of four.
