A Democratic mayor in Massachusetts has been arrested after federal investigators accused him of turning more than $1.5 million in taxpayer-funded pandemic loans into a fund for his political campaign and personal debts. Lawrence Mayor Brian DePeña, 61, was taken into custody Friday and charged with one count of wire fraud and one count of money laundering. Prosecutors allege that he diverted money intended to help his tire business survive the COVID-19 shutdowns. The funds allegedly went toward his campaign, personal taxes, and more than $880,000 in high-interest mortgages.
DePeña has served as mayor of Lawrence since winning the office in November 2021 and was reelected in November 2025. He previously sat on the Lawrence City Council from 2016 until 2021. Outside of politics, DePeña owns Tenares Tire Services Inc., a tire-sales and automotive-services business that he incorporated in Massachusetts in 2014. Federal investigators say that business became the vehicle through which he obtained the government loans at the center of the case.
The loans came from the Small Business Administration’s Economic Injury Disaster Loan program, which was expanded during the pandemic to assist businesses suffering substantial financial disruption. The loans carried a 3.75% interest rate and could be used only as working capital to cover pandemic-related economic injuries. Political campaigns, personal tax bills, and mortgage refinancing were prohibited uses.
As Trending Politics reported, DePeña initially obtained a $150,000 loan for Tenares Tire in June 2020. The Justice Department said he used most of that original amount as legitimate working capital. Prosecutors allege his financial position had changed by early 2021, when his mayoral campaign was struggling to pay bills and he owed personal back taxes to the IRS. He also owed nearly $900,000 to two private lenders charging interest rates of 12% and 8% on loans for properties he owned.
DePeña allegedly sought an increase in the government loan in April 2021, and the SBA approved another $350,000 that July, bringing the total to $500,000. According to charging documents, the money arrived in the Tenares Tire bank account on August 16th, when its balance stood at just $20.23. Prosecutors say DePeña soon used $85,000 to pay his personal taxes. He also allegedly transferred $120,000 into a personal account and directed $90,000 into the Committee to Elect Brian DePeña, with the campaign deposits identified as candidate loans.
Federal investigators say DePeña pursued another increase in October 2021 while the high-interest debts remained outstanding and his campaign continued to struggle financially. The SBA approved an additional $1,154,400, raising the Tenares Tire loan to $1,654,400. When approximately $1,154,188 reached the company account on November 30th, DePeña allegedly transferred the entire amount into a personal account that previously held about $1,401. Prosecutors say he then directed another $42,112.96 into his campaign through two checks, including one deposited after the campaign account had reportedly been overdrawn for approximately 20 days.
The mayor allegedly used another $883,293 from the loan to eliminate the two high-interest real-estate debts. Charging documents say he purchased a $538,109.03 treasurer’s check on December 9th, 2021, to pay off one loan and a $345,184.13 check nine days later to pay off the other. Refinancing existing loans was specifically prohibited under the EIDL program, and investigators said the SBA would not have approved the money had it known how DePeña allegedly intended to use it. As of August 5th, 2026, he had reportedly made 16 payments totaling approximately $130,160, all of which had gone toward interest, while the outstanding principal remained approximately $1,654,420.
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The wire-fraud charge carries a possible sentence of up to 20 years in prison, three years of supervised release, and a fine of up to $250,000. The money-laundering charge carries up to 10 years in prison, three years of supervised release, and another possible $250,000 fine. U.S. Attorney Leah Foley said the mayor “betrayed” the trust placed in him by Lawrence residents through his alleged conduct.
FBI Boston Special Agent in Charge Ted Docks described the money as emergency assistance intended to keep struggling companies afloat during the pandemic. “It’s alleged the Mayor fraudulently obtained over $1.5 million in small business loans which he then used as his own slush fund to pay his personal taxes, fund his mayoral campaign, and pay off $883,000 in high-interest mortgages on several properties he owned,” Docks said. “This was emergency financial assistance meant to be a safety net for struggling businesses, not Mr. Depena’s own personal ATM.”