According to federal charging documents, Tenares Tire initially obtained a $150,000 EIDL in June 2020. Prosecutors say most of that first round of money was actually used for legitimate business purposes.
The situation allegedly changed as DePeña prepared his campaign for mayor.
By early 2021, prosecutors say DePeña was dealing with several significant financial pressures. His campaign was having difficulty paying its bills, he allegedly owed money to the IRS for personal back taxes, and nearly $900,000 was owed to two private lenders on loans secured by properties he owned.
DePeña subsequently sought substantially more federal pandemic relief money for Tenares Tire.
The SBA approved a $350,000 increase in July 2021, raising the company’s total EIDL to $500,000. When the additional money landed in the company’s account on August 16, prosecutors say the account contained just $20.23 beforehand.
Federal authorities allege DePeña then used $85,000 of the government-backed funds to pay his personal IRS tax liabilities.
Another $120,000 was allegedly moved from the business account into DePeña’s personal account. From there, prosecutors say $90,000 was sent through checks to “The Committee to Elect Brian Depena,” with the transactions recorded as loans to his political campaign.
But that was only the beginning, according to the government.
In October 2021, DePeña allegedly requested yet another increase in the EIDL while his campaign remained financially strained and the expensive private loans were still outstanding.
The SBA ultimately authorized another $1,154,400, increasing the total Tenares Tire loan to approximately $1.65 million.
On November 30, roughly $1.154 million arrived in the business account. Prosecutors allege DePeña transferred virtually all of it into a personal account that previously held only $1,401.
Authorities say some of that money again found its way into his mayoral campaign.
DePeña allegedly wrote campaign checks for $10,000 and $32,112.96. Prosecutors noted that the first of those checks was deposited on December 2 after the campaign account had reportedly been overdrawn for about 20 days.
Hundreds of thousands of dollars were also allegedly used to wipe out DePeña’s private debts.
According to the charging documents, $883,293 in EIDL proceeds went toward paying off the two hard-money loans. DePeña allegedly purchased a treasurer’s check for $538,109.03 on December 9, followed by another for $345,184.13 on December 18.
The government contends those expenditures fell far outside the purpose of the pandemic loan program.
EIDL funds were intended to provide working capital to businesses suffering economic damage caused by COVID-19. Prosecutors say the program did not permit borrowers to use the money to finance political campaigns, settle personal tax liabilities, or pay mortgages and similar personal debts.
Years later, taxpayers are allegedly still waiting for most of the money to come back.
As of August 5, 2026, prosecutors say DePeña had made only 16 payments on the Tenares Tire loan, totaling approximately $130,160. Those payments were applied entirely toward accrued interest, leaving an outstanding principal balance of roughly $1.654 million.
U.S. Attorney Leah Foley issued a sharp statement following the mayor’s arrest.
“Mayor DePena was elected to be a leader for the City of Lawrence. He was looked up to and trusted by his constituents, but he betrayed that trust through his alleged corruption and lies. Today’s arrest is just another example of our determination to root out fraud by anyone, even public officials and holding elected officials accountable,” Foley said.
DePeña appeared in federal court in Boston on Friday, August 14, before being released under several conditions.
Among them, the mayor was ordered to surrender his passport, remain in Massachusetts, report to probation and refrain from applying for additional loans unless he first receives court approval.
Despite the criminal case now hanging over City Hall, DePeña apparently has no plans to step aside. An attorney representing the mayor indicated that DePeña does not intend to resign while the federal proceedings continue.
The stakes could be substantial if prosecutors ultimately secure a conviction.
The wire fraud count carries a statutory maximum of 20 years in federal prison, as well as up to three years of supervised release and a fine of as much as $250,000. The money laundering count carries up to 10 years behind bars, three years of supervised release and a maximum $250,000 fine.
Any sentence would ultimately be determined by a federal judge using the applicable statutes and federal sentencing guidelines.
For now, the allegations remain allegations, and DePeña is presumed innocent unless and until proven guilty in court.
But the federal case presents an extraordinary political spectacle for Lawrence: its sitting mayor is accused of obtaining taxpayer-backed pandemic relief for his private business and then funneling large portions of the money toward his campaign, personal tax obligations and private debts — all while eventually winning the office he still holds today.
