8-27-16
On August 14th Lawrence Mayor Brian DePena was arrested for fraudulent use of COVID money.
Initially the federal government charged Lawrence Mayor Brian DePena with two counts of: Wire Fraud Aiding and Abetting (count 1) Unlawful Monetary Transactions Aiding and Abetting (Count 2).
Yesterday the federal government added 9 more charges to DePena’s indictment.
Here is a breakdown of those new charges and what they mean!
EXACTLY WHAT IS NEW IN THE DePEÑA INDICTMENT?
A federal grand jury has indicted Lawrence Mayor Brian DePeña on eleven felony counts arising from the government’s allegation that he fraudulently obtained federal COVID-relief loan money for Tenares Tire and then used much of it for prohibited personal purposes.
DePeña was originally charged by criminal complaint with one count of wire fraud and one count of money laundering.
The new indictment expands the case to:
- Four counts of wire fraud.
- Seven counts of unlawful monetary transactions—commonly described as money laundering.
The indictment does not accuse DePeña of taking or misusing money belonging to the City of Lawrence. It concerns federal Economic Injury Disaster Loan funds issued to his privately owned business.
These are allegations. DePeña is presumed innocent unless and until proven guilty.
WHAT IS ACTUALLY NEW?
Most of the money transfers and alleged uses of the EIDL funds were already described in the government’s original affidavit and outlined in The Valley Patriot’s previous story.
What is new is that the grand jury has now made eleven individual transactions or electronic communications into separate felony counts.
THE FOUR WIRE-FRAUD COUNTS
Federal prosecutors allege that DePeña used interstate electronic communications to carry out the alleged fraud.
COUNT ONE: THE FIRST LOAN CERTIFICATION
On August 12, 2021, DePeña allegedly electronically submitted an amended Loan Authorization and Agreement to the Small Business Administration for Tenares Tire.
The government alleges that he falsely certified that the loan proceeds would be used solely as working capital to alleviate economic injury caused by the COVID-19 pandemic.
COUNT TWO: THE $350,000 TRANSFER
On August 16, 2021, the SBA electronically transferred approximately $350,000 into Tenares Tire’s Digital Federal Credit Union account.
The government alleges that this transfer resulted from the allegedly false loan certification submitted four days earlier.
COUNT THREE: THE SECOND LOAN CERTIFICATION
On October 27, 2021, DePeña allegedly submitted another amended Loan Authorization and Agreement to the SBA.
That modification increased the total authorized EIDL amount for Tenares Tire to approximately $1,654,400.
Prosecutors allege that DePeña again falsely certified that the proceeds would be used only as permitted working capital for the business.
COUNT FOUR: THE $1.154 MILLION TRANSFER
On November 30, 2021, the SBA electronically transferred approximately $1,154,188 into Tenares Tire’s business account.
The indictment alleges that this transfer resulted from the second allegedly fraudulent loan certification.
THE SEVEN MONEY-LAUNDERING COUNTS
Federal law prohibits someone from knowingly conducting certain monetary transactions involving more than $10,000 in property derived from specified criminal activity.
Here, prosecutors allege that each transaction involved money obtained through wire fraud.
COUNTS FIVE AND SIX: $85,000 PAID TO THE IRS
The indictment divides the previously reported $85,000 payment toward DePeña’s personal federal tax liabilities into two separate counts:
- Count Five alleges a $55,000 electronic payment to the IRS on August 26, 2021.
- Count Six alleges a separate $30,000 electronic payment to the IRS on the same date.
Both payments allegedly came directly from the Tenares Tire business account and involved money traceable to the federal EIDL proceeds.
COUNT SEVEN: $25,000 FOR THE MAYORAL CAMPAIGN
Count Seven concerns the September 14, 2021 deposit of a $25,000 treasurer’s check into the Committee to Elect Brian DePeña’s campaign account.
The government alleges that the money was traceable to the EIDL proceeds.
COUNT EIGHT: ANOTHER $25,000 CAMPAIGN DEPOSIT
Count Eight concerns a separate $25,000 check deposited into DePeña’s campaign account on approximately October 21, 2021.
The indictment says the check was drawn from one of DePeña’s personal accounts and was payable to “CTE Brian Depena.”
Prosecutors allege that this money was also traceable to the federal loan proceeds.
COUNT NINE: THE $538,109 REAL-ESTATE PAYMENT
Count Nine concerns DePeña’s alleged purchase of a treasurer’s check for $538,109.03 on December 9, 2021.
The government alleges that the check was purchased with EIDL money in DePeña’s personal account and used to pay off a high-interest loan secured by properties he owned.
COUNT TEN: THE $345,184 REAL-ESTATE PAYMENT
Count Ten concerns another treasurer’s check, this one for $345,184.13, allegedly purchased on December 18, 2021.
Prosecutors allege that the money was traceable to the EIDL proceeds and was used to pay off a second loan secured by DePeña’s properties.
COUNT ELEVEN: $32,112.96 FOR THE CAMPAIGN
Count Eleven concerns a $32,112.96 check deposited into the Committee to Elect Brian DePeña account on January 11, 2022.
The indictment alleges that this money was also derived from the federal EIDL proceeds.
WHAT THE INDICTMENT DOES NOT ADD
The new indictment does not allege:
- That DePeña stole or diverted City of Lawrence money.
- That he misused Lawrence Redevelopment Authority property.
- That city employees or city services were used to carry out the alleged scheme.
- That any other city official participated in the alleged crimes.
- Any new alleged category of personal spending beyond the campaign contributions, personal federal taxes and real-estate debt already disclosed.
THE BOTTOM LINE
The government’s basic factual allegations have not substantially changed.
What has changed is the number and specificity of the criminal charges. Instead of charging the overall alleged conduct through one wire-fraud count and one money-laundering count, prosecutors have obtained an indictment identifying four particular electronic communications or transfers as wire fraud and seven particular financial transactions as money laundering.
DePeña now faces eleven federal felony counts rather than two.
One especially worthwhile detail: the original story described the $85,000 IRS payment as a single total.
The indictment now reveals why prosecutors can make it two separate counts—it was allegedly divided into one $55,000 payment and one $30,000 payment, both made on August 26, 2021.
I would also avoid saying “the original three charges.” The original federal complaint charged only two offenses: one count of wire fraud and one count of money laundering. The three things you may be remembering are the three alleged uses of the money: the campaign, personal tax liabilities, and real-estate debt. Original DOJ announcement, new DOJ indictment announcement.
PREVIOUS STORIES
Lawrence Mayor Arrested by Feds for Wire Fraud Unlawful Monetary Transactions
Exactly What Do the Federal Documents Say About the DePeña Case?