Authorities took a Democratic Party official into custody for alleged COVID fraud in August 2026, marking the second time that month such an arrest was made. U.S. Attorney Leah Foley revealed that police slapped cuffs on Massachusetts state Rep. Francisco Paulino and charged him with 11 counts connected to pandemic unemployment insurance fraud, pandemic loan fraud, and money laundering.
“According to the Paulino indictment, Mr. Paulino devised a scheme to obtain more than $700,000 in federal pandemic relief funds. It is alleged that Paulino used some of the money for his own personal use, including real estate expenses, loan payments and transfers to his campaign account,” Foley went on to say. “Other money he flipped around and lent to other individuals at higher interest rates than the pandemic loan rate.”
The indictment stated that the alleged fraud started in 2020 when Paulino signed up for COVID relief funding on the behalf of an “unwitting 77-year-old relative.” Paulino’s arrest was made a week after Lawrence Mayor Brian DePena was taken into FBI custody for similar crimes. A federal grand jury also indicted DePena with 11 counts related to pandemic loan fraud and money laundering.
According to a report from The New York Post, the FBI said that DePena first diverted public funds in 2020 while serving on the Lawrence city council. “Everyone listening today knows how difficult it was for Americans during the pandemic,” Foley explained. “The money these two individuals allegedly scammed was meant for hardworking Americans and struggling business owners, not for two greedy individuals who lied and stole for their own personal benefit.”
“It is never a proud moment when we arrest a public official, but we will continue to do it until the message is received: No one is above the law, and no one gets a pass,” she concluded. Massachusetts Speaker of the House Ron Mariano spoke about the charges against Paulino, calling the situation “extremely concerning” before stating that the House would “closely monitor the legal proceedings and, upon their conclusion, take appropriate action if necessary to ensure accountability.”
According to NBC Boston, prosecutors say that Paulino was the owner and operator of Madison Tax, LLC and Madison Mortgage Inc. in the city of Lawrence. Starting in or around April 2020 and going on until December 2021, Paulino cooked up a scheme to obtain pandemic-related relief funds by using the personal identifying information of other individuals through Madison Tax.
He used intermediaries to funnel the money to his own personal and business bank accounts. Paulino pleaded not guilty to all charges against him. Judge David Hennessy is presiding over the case and revealed that Paulino was being represented by a federal public defender as his counsel was based in the Washington area.
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Conditions for his release from jail include that he only travel within the states of Massachusetts and New Hampshire. If he needs to travel anywhere else, he must first obtain legal permission. He is also not allowed to change his physical address. Madison Tax must now halt all operations and notify its clients. Paulino is also required to hand over his passport, though that has already been seized.
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