FBI Boston and IRS Criminal Investigation say the two Merrimack Valley officials fraudulently obtained more than $2 million combined in pandemic relief funds
Massachusetts State Representative Francisco Paulino was arrested and indicted Wednesday, August 26, 2026, on federal charges alleging he fraudulently obtained more than $700,000 in COVID-19 unemployment benefits and small-business relief funds, FBI Boston announced. His arrest comes less than two weeks after Lawrence Mayor Brian DePeña was arrested on separate but related federal fraud charges on August 14.
The Charges Against Paulino
Paulino, a Methuen Democrat who represents the 16th Essex District covering parts of Lawrence and Methuen, was indicted on eight counts of aiding and abetting wire fraud and three counts of aiding and abetting money laundering, according to federal court records. U.S. Attorney for Massachusetts Leah Foley said Paulino used other people’s identities and intermediaries to funnel federal pandemic-relief money into his personal and business accounts between April 2020 and December 2021.
Prosecutors allege Paulino filed a pandemic unemployment benefits claim for an elderly relative without that person’s knowledge, directing the funds into a bank account held solely in his name, then submitted fabricated documents when the state’s Department of Unemployment Assistance later questioned the claim. He is also accused of fraudulently obtaining economic injury disaster loans for two of his businesses, including one filed in the name of a client. Paulino runs a tax-preparation business and lists himself as a tax lawyer and business consultant; his companies include Madison Tax LLC and Madison Mortgage Inc.
Notably, Paulino’s arrest follows an earlier, unrelated federal search: in November 2024, FBI agents conducted what the bureau described as “court-authorized activity” at an Essex Street property Paulino owns in Lawrence, focused on a donut shop operating inside the building. Paulino was not charged at that time and told reporters he owned the building but not the business inside it.
The Charges Against DePeña
Lawrence Mayor Brian DePeña, 61, was arrested August 14 and formally indicted the same day as Paulino on charges of wire fraud and money laundering. Federal prosecutors allege DePeña fraudulently obtained more than $1.5 million in COVID-era small-business loans, then used the funds to pay political campaign expenses, cover personal back taxes, and pay down high-interest mortgages on properties he owned in Lawrence. Authorities have said the cases against Paulino and DePeña are separate and unrelated schemes that happened to surface within weeks of each other.
Officials’ Statements
At a joint press conference, FBI Boston Special Agent in Charge Ted Docks said the two men had treated pandemic relief programs as personal financial resources rather than public assistance meant for struggling residents and businesses. U.S. Attorney Leah Foley was similarly direct, saying the funds were intended for hard-working Americans and struggling business owners, not for personal enrichment.
What’s Next
Both men face prosecution in the U.S. District Court for the District of Massachusetts. As of this report, no attorney had been publicly listed for Paulino. Both officials are presumed innocent unless and until proven guilty in court; the allegations described above reflect the government’s charges as laid out in the indictments and criminal complaints, not proven facts.
The back-to-back arrests mark the second time in as many weeks that a high-ranking elected official from the Lawrence area has faced federal fraud charges tied to pandemic relief funds, intensifying scrutiny of Merrimack Valley political leadership — a region home to one of Massachusetts’ largest Latino and immigrant communities, including a significant Haitian population.
