Two Massachusetts Democrats Charged in Separate COVID Relief Fraud Schemes

Two Democratic elected officials in Massachusetts are facing federal charges over separate alleged schemes involving COVID-era relief money, with prosecutors accusing them of diverting taxpayer funds intended to help struggling Americans and businesses during the pandemic.

Massachusetts State Rep. Francisco Paulino was arrested Wednesday morning after a federal grand jury returned an 11-count indictment involving pandemic unemployment insurance fraud, pandemic loan fraud and money laundering. Federal prosecutors allege Paulino fraudulently obtained more than $700,000 in government relief funds.

According to prosecutors, the alleged scheme began in 2020 when Paulino sought COVID relief money using information connected to an unsuspecting 77-year-old relative. Authorities allege he later used portions of the money for purposes that had nothing to do with pandemic relief.

Federal investigators claim some of the funds went toward Paulino’s personal real estate expenses and loan payments. Prosecutors also allege that money was transferred into his campaign account and that he lent some of the taxpayer-backed funds to other individuals at higher interest rates than he had been charged.

U.S. Attorney Leah Foley blasted the alleged conduct, emphasizing that pandemic relief programs were established during a national emergency to help families and businesses struggling to survive unprecedented economic shutdowns.

Paulino’s arrest comes roughly a week after another Massachusetts Democrat, Lawrence Mayor Brian DePeña, was arrested in a separate federal investigation involving COVID relief funds. DePeña also faces an 11-count federal indictment containing charges related to pandemic loan fraud and money laundering.

Federal authorities allege DePeña’s conduct began in 2020, when he was serving on the Lawrence City Council. Prosecutors accuse him of improperly obtaining more than $1.5 million through the Economic Injury Disaster Loan program, which was established to provide emergency assistance to businesses suffering economic losses during the pandemic.

DePeña allegedly applied for relief money connected to Tenares Tire Services, his Lawrence tire business. Prosecutors contend that instead of using all of the money for legitimate business expenses, he diverted portions toward personal debts and his political activities.

The mayor’s case attracted additional attention after his arraignment when reporters attempted to question him about the allegations. His attorney told reporters that DePeña did not speak English, while the mayor responded by repeatedly saying, “God bless you.”

Federal authorities have emphasized that both men are presumed innocent unless proven guilty. The charges remain allegations, and prosecutors will be required to establish their cases in court before either official can be convicted.

The two cases nevertheless place renewed scrutiny on the enormous amount of fraud associated with pandemic-era government programs. The rapid distribution of federal relief money created opportunities for criminals and alleged fraudsters to exploit programs designed to keep businesses operating and Americans financially afloat.

Foley said the government intends to pursue public officials just as aggressively as any other defendants accused of stealing taxpayer money. She argued that holding elected office makes alleged abuse of public funds particularly serious because voters place additional trust in those chosen to represent them.

The back-to-back indictments now leave two Massachusetts Democratic officials facing potentially serious federal consequences over money originally intended to provide emergency assistance during one of the country’s most disruptive economic crises. Both cases will proceed through the federal court system as investigators continue their broader crackdown on alleged pandemic relief fraud.