What investigators say happened to a $1.5 million pandemic loan

NewsA Massachusetts mayor now faces questions over decisions made years agoLawrence Mayor Brian DePena leaves federal court in Boston after prosecutors accused him of misusing more than $1.5 million in pandemic-related business loans for campaign expenses, tax obligations and personal debts. (AP Photo/Matt Rourke, File)APBy Chris Pugh, cleveland.comAdvance Local Express DeskFederal authorities have charged the mayor of Lawrence, Massachusetts, with fraud and money laundering after alleging he improperly obtained more than $1.5 million in pandemic relief funding and redirected much of the money to personal and political expenses rather than business operations, Yahoo! said. Brian DePena, 61, was arrested Friday and accused of misusing federal COVID-19 assistance that had been approved for his tire and automotive business. Prosecutors allege the funds were intended to help businesses weather pandemic-related economic challenges but instead were diverted for other purposes, wbur.com reported. According to court documents, DePena secured a disaster loan through his company, Tenares Tire Services, and later received additional funding that brought the total amount obtained to more than $1.5 million. Investigators allege he transferred substantial portions of the money into personal accounts and used it in ways not permitted under the federal program, according to CBS News. Federal prosecutors contend that more than $880,000 was used to eliminate high-interest loans tied to properties owned by DePena. Authorities also allege tens of thousands of dollars from the loan funds were directed to his campaign account during his successful 2021 bid for mayor. Investigators further allege that pandemic relief money was used to satisfy personal tax obligations and other debts. Prosecutors say the transactions violated the intended purpose of the Small Business Administration’s Economic Injury Disaster Loan program, which was created to support businesses harmed by the pandemic. The FBI, IRS Criminal Investigation and federal prosecutors participated in the investigation. Officials said the allegations represent an abuse of emergency government assistance that was meant to help struggling businesses remain operational during an unprecedented public health crisis. Federal officials said elected leaders are expected to safeguard public trust and be accountable for how government funds are used. Investigators alleged that DePena treated federally backed relief money as a source of funding for personal and political obligations rather than business recovery efforts. DePena appeared in federal court in Boston following his arrest. A judge allowed his release under several conditions, including restrictions involving travel and future borrowing, according to reports and court statements, wgbh.org reported. DePena has served as mayor of Lawrence since late 2021 and won reelection in 2025. Before becoming mayor, he served on the Lawrence City Council. No plea was reported during his initial court appearance.The charges remain allegations, and DePena is presumed innocent unless proven guilty in court. If convicted, the federal offenses carry potentially significant prison sentences under federal law. Chris Pugh covers trending news and national breaking stories, focusing on the moments, conversations, and cultural flashpoints shaping the national news cycle. Chris worked as a digital reporter for...This article was produced with assistance from AI tools and reviewed by Cleveland.com staff.