A Democrat Massachusetts mayor was arrested and charged on Friday with fraudulently obtaining over $1.5 million in Covid business loans.
The Mayor of Lawrence, Massachusetts, Brian Depena, used the proceeds from Covid small-business loans to fund his campaign, pay his personal taxes and pay off nearly $900,000 in high-interest, hard-money mortgages on his properties, according to the Department of Justice.
According to the charging documents during the pandemic back in 2020 and 2021, Depena applied for a taxpayer-funded Covid-era Economic Injury Disaster Loans (“EIDL”) for his tire business.
The EIDL loans must be used as working capital to provide relief to businesses that suffered economic losses during Covid.
However, Depena used the Covid loans to fund his struggling campaign, pay off two high-interest mortgages, and pay back taxes.
Per the DOJ:
Depena allegedly caused Tenares Tire to apply for and obtain an EIDL in the amount of $150,000 in June 2020 and then used the majority of those funds as working capital for the business. However, according to the charging documents, Depena needed cash by early 2021. It is alleged that his mayoral campaign was struggling to pay bills, he owed the IRS for back taxes and he owed almost $900,000 to two private, hard money lenders who were charging Depena 12% and 8% interest – significantly more than the EIDL rate of 3.75% – on loans that encumbered various properties Depena owned in Lawrence.
In April 2021, Depena allegedly caused a request for an increase of the Tenares Tire EIDL. On July 14, 2021, the SBA approved an increase of the loan by $350,000, bringing the total Tenares Tire EIDL to $500,000. However, the SBA did not release the funds for another month. While waiting, Depena allegedly sent the following texts (originally in Spanish, here translated to English) to his accountant and financial advisor, who had been assisting Depena with the EIDL application and modification.
Hellbound and Down 