Massachusetts State Representative Francisco Paulino was arrested and charged with wire fraud and money laundering in connection with an alleged scheme to defraud pandemic relief programs. A criminal complaint filed Tuesday in U.S. District Court in Boston accuses Paulino, who represents the 16th Essex District, of using intermediaries and other people's personal identifying information to funnel pandemic-related relief funds into his personal and business bank accounts.
The arrest, first reported by NBC Boston, comes less than two weeks after Lawrence Mayor Brian DePeña was arrested at his home on August 14 and charged with wire fraud and money laundering in a separate case. U.S. Attorney Leah Foley was set to detail the charges against both men at an 11 a.m. press conference Wednesday at the federal courthouse in Boston, held jointly with the FBI and the IRS, according to the station's report. FBI Boston also announced Paulino's arrest and charges.
A Scheme Prosecutors Say Ran for Nearly Two Years
Prosecutors allege Paulino devised and executed the fraud scheme starting in April 2020 and continuing until December 2021, per the same account. During that period, Paulino owned and operated Madison Tax, LLC and Madison Mortgage Inc. in Lawrence, and prosecutors allege his scheme used Madison Tax as a device to defraud pandemic relief programs.
The mayor's case is separate but was announced around the same time. In an August 14 criminal complaint, federal prosecutors alleged that DePeña fraudulently obtained more than $1.5 million in Economic Injury Disaster Loans for his automotive business, Tenares Tire Service Inc., using the proceeds to pay off $880,000 in high-interest mortgages, personal tax liabilities, and political campaign expenses, according to the U.S. Attorney's Office for the District of Massachusetts. DePeña served as a Lawrence city councilor from 2016 to 2021 before winning election as mayor in November 2021 and securing re-election last November, all while operating the tire business.
Paulino's Property Was Raided Nearly Two Years Earlier
Paulino's arrest is not the federal government's first contact with his business entities. In November 2024, FBI agents executed a court-authorized search warrant at a commercial and residential property at 256-262 Essex Street in Lawrence owned by Paulino's corporate entities, Jackson & Madison LLC and Madison Tax LLC, as reported by Diario Libre. The mixed-use property housed a donut shop and 17 residential condominiums.
Paulino's background gives the allegations an added edge. He earned a Juris Doctor and a Master of Laws in Taxation from Suffolk University Law School in 2016 and previously served on the Massachusetts House Federal Stimulus and Census Oversight Committee during the 2023-2024 legislative session, per Ballotpedia. That committee was tasked with overseeing the very category of federal relief funds he is now accused of siphoning.
Second Merrimack Valley Official Charged in 12 Days
Paulino's arrest made him the second elected official from the Merrimack Valley region taken into federal custody on COVID-19 relief fraud charges within a 12-day span, according to The Maine Wire. Lawrence previously drew scrutiny this month when Hoodline reported on an Andover fake-voter scheme that also referenced DePeña's pending federal case.
The pandemic-era loan programs at the center of both cases were themselves the subject of a February 2026 report from the U.S. Senate Committee on Small Business and Entrepreneurship, which found that weak oversight and reliance on self-certification allowed an estimated $200 billion in fraudulent loans to be disbursed nationwide through the Paycheck Protection Program and Economic Injury Disaster Loan initiatives Congress created under the 2020 CARES Act. Federal law has since extended the statute of limitations for SBA COVID relief fraud from five years to 10, according to the U.S. Government Accountability Office, meaning prosecutors can continue bringing criminal indictments through at least 2030 or 2031.
Prior Case Shows Prison Time Is a Real Possibility
Massachusetts has seen this pattern before. Former State Senator Dean Tran was convicted in September 2024 on 20 counts of wire fraud for illegally collecting $30,120 in pandemic unemployment benefits while working as a paid consultant, and he was sentenced to 18 months in federal prison in February 2025, according to the U.S. Department of Justice. Tran had served in the state Senate from 2017 to January 2021.
The exposure facing Paulino and DePeña is considerably steeper on paper. A federal wire fraud conviction under 18 U.S.C. § 1343 carries a statutory maximum of 20 years in prison, rising to as much as 30 years and fines up to $1 million per count when the scheme involves federal disaster relief assistance or financial institutions, per Sharifov & Associates, PLLC. Money laundering charges under 18 U.S.C. §§ 1956 and 1957 add maximum sentences of up to 20 years and 10 years per count, respectively, with fines potentially reaching $500,000 or twice the value of the criminally derived property, according to the Dallas Justice Blog. Prosecutors frequently charge each wire transfer or financial transaction as a separate count, meaning the total exposure in multi-count indictments can stack well beyond the per-count maximums.
It remains unclear whether Paulino and DePeña's alleged schemes were connected through shared tax intermediaries or financial consultants, and how Lawrence's political leadership will manage any recall effort or governance transition in the wake of two consecutive arrests. Those questions were left open pending Wednesday's press conference and further court proceedings.
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