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Home My WebLink About08.23.26 Board Correspondence - FW_ Lawrence Mayor Charged in Alleged Diversion of Pandemic Business Loans.ATTENTION: This message originated from outside Butte County. Please exercise judgment before opening attachments, clicking on links, or replying.. From:Clerk of the Board To:Mutony, Heather Cc:Lee, Lewis Subject:Board Correspondence - FW: Lawrence Mayor Charged in Alleged Diversion of Pandemic Business Loans Date:Tuesday, August 25, 2026 7:47:04 AM Attachments:image001.png Please see Board Correspondence - Lewis LeeAdministrative Technician - ConfidentialButte County Administration25 County Center Drive, Suite 200 • Oroville, CA 95965T: 530.552.3326www.buttecounty.ca.gov | lelee@buttecounty.ca.gov From: lance dreiss <lancedreiss@att.net> Sent: Sunday, August 23, 2026 3:58 PM To: Shared Mailbox Clerk of the Board <pcbs@countyofplumas.com>; Assemblymember.Gallagher@assembly.ca.gov; Senator.Dahle@senate.ca.gov; davidhollister@countyofplumas.com; sheriff@countyofplumas.com; District Attorney <District_Attorney@buttecounty.ca.gov>; Nicolereinert@countyofplumas.com; Kitts, Melissa <mkitts@buttecounty.ca.gov>; Soderstrom, Monica <msoderstrom@buttecounty.ca.gov>; Durfee, Peter <PDurfee@buttecounty.ca.gov>; Ronald Owens <ronald@muzzledtruth.com>; Kimmelshue, Tod <TKimmelshue@buttecounty.ca.gov>; Pickett, Andy <APickett@buttecounty.ca.gov>; Connelly, Bill <BConnelly@buttecounty.ca.gov>; Teeter, Doug <DTeeter@buttecounty.ca.gov>; Beaudoin, Jarett <JBeaudoin@buttecounty.ca.gov>; Julie Threet <julie4butte5@gmail.com>; Waugh, Melanie <mwaugh@buttecounty.ca.gov>; Ritter, Tami <TRitter@buttecounty.ca.gov>; Teri DuBose <Teri.DuBose@mail.house.gov>; Clerk of the Board <clerkoftheboard@buttecounty.ca.gov>; Stephens, Brad J. <BStephens@buttecounty.ca.gov>; danpargee@countyofplumas.com Subject: Fwd: Lawrence Mayor Charged in Alleged Diversion of Pandemic Business Loans Public Record “Prosecutors say Brian DePena misused more than $1.5 million in COVID relief funds for personal and political expenses, renewing focus on the extent of such fraud.” diana dreiss Begin forwarded message: From: Chester Tam from Chester Tam Substack <chestermtam+massachusetts@substack.com> Date: August 19, 2026 at 6:21:27 AM PDT To: lancedreiss@att.net Subject: Lawrence Mayor Charged in Alleged Diversion of Pandemic Business Loans Reply-To: Chester Tam from Chester Tam Substack <reply+3i4sx6&kcryl&&ecc51efb06e8c08cd767cd679b07c7fb031e84bfb72e d531e95a85b7beb931a2@mg1.substack.com> Prosecutors say Brian DePena misused more than $1.5 million in COVID relief funds for personal and political expenses, renewing focus on the extent of such fraud.͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ Forwarded this email? Subscribe here for moreLawrence Mayor Charged in AllegedDiversion of Pandemic BusinessLoans Prosecutors say Brian DePena misused more than $1.5 million in COVID relief funds for personal and political expenses, renewing focus on the extent of such fraud. CHESTER TAM AUG 19 READ IN APP Image The arrest of Lawrence Mayor Brian DePena on federal charges of wire fraud and money laundering has drawn attention to the intersection of public office, private business interests, and the residual effects of pandemic-era relief programs. Federal prosecutors allege that DePena, who owns Tenares Tire Services Inc., a tire sales and automotive services company in the city, obtained more than $1.5 million in Economic Injury Disaster Loans administered by the Small Business Administration. These funds, intended to provide working capital for eligible small businesses facing substantial economic disruption from the COVID-19 pandemic, were instead directed toward personal and political purposes, according to charging documents. DePena, 61, was taken into custody by the FBI and appeared in federal court in Boston, where he was released under conditions that include restrictions on travel outside Massachusetts and requirements to report to probation authorities. He faces one count of wire fraud, which carries a potential maximum of 20 years in prison, and one count of money laundering, with a potential maximum of 10 years, along with possible fines and supervised release. The case remains pending, and DePena is presumed innocent unless proven guilty. He was first elected mayor in November 2021 and reelected in 2025, having previously served on the Lawrence City Council. Prosecutors outline a sequence in which DePena applied for the loans in 2020 and 2021 on behalf of his business. An initial disbursement of $150,000 in June 2020 was largely used for legitimate working capital needs of Tenares Tire Services. Subsequent increases followed, culminating in a total principal of approximately $1.65 million. Authorities allege that portions of these later funds were transferred from business accounts to personal ones and then applied to settle personal tax liabilities with the Internal Revenue Service amounting to about $85,000, to support his mayoral campaign through checks totaling tens of thousands of dollars to the Committee to Elect Brian DePena, and to pay off roughly $883,000 in high-interest private mortgages on properties he owned in Lawrence. As of early August 2026, only a limited number of payments had been made on the outstanding loan balance. The Economic Injury Disaster Loan program formed part of a broader suite of federal responses designed to stabilize small businesses during widespread shutdowns and economic uncertainty. Eligibility required certification that funds would serve as working capital to address pandemic-related injuries, excluding personal expenses, political activities, or debt unrelated to the business. The speed of the program’s rollout, driven by the urgency of the public health crisis, relied heavily on self- certification and limited upfront verification, factors that later assessments identified as contributing to vulnerabilities. Questions about the prevalence of similar misuse arise naturally from cases of this nature. Official estimates from the Small Business Administration’s Office of Inspector General indicate that of the approximately $1.2 trillion disbursed across COVID-era Economic Injury Disaster Loans and Paycheck Protection Program funds, more than $200 billion showed indicators of potential fraud, representing roughly 17 percent of the total. Within the Economic Injury Disaster Loan program alone, the estimate of potentially fraudulent disbursements exceeded $136 billion, or about one-third of that program’s outlays. These figures derive from data analytics, investigative casework, and reviews of fraud indicators such as mismatched identities, non-operating businesses, inflated employee counts, and falsified documentation. The Government Accountability Office has independently documented millions of recipients across pandemic relief programs exhibiting warning signs consistent with potential fraud, while noting that such indicators do not equate to proven criminal conduct and require further investigation. As of various reporting periods through 2023 and beyond, the Inspector General’s office had generated thousands of leads, resulting in hundreds of indictments, arrests, and convictions related to these programs. Collaboration with other agencies recovered or returned nearly $30 billion in funds. Prosecutions have continued in subsequent years, reflecting the extended statute of limitations and ongoing analytical work. By 2025 and into 2026, additional referrals of suspected fraudulent loans for collection and further legal action have been announced, underscoring that resolution of these matters spans years. Not every instance of nonpayment or irregular use constitutes intentional fraud; some businesses faced genuine hardship that led to default for non-criminal reasons. Distinguishing between deliberate diversion and economic distress remains a core challenge for investigators. Nonetheless, the scale of potential misuse documented by oversight bodies suggests that the kind of alleged conduct in the Lawrence case, while not universal, occurred with sufficient frequency to represent a significant share of the overall program expenditures. Schemes ranged from individual applicants falsifying eligibility to organized networks employing shell entities or stolen identities. Public officials and private business owners alike have appeared among those charged, indicating that position or status did not uniformly deter alleged exploitation. The design of the relief effort prioritized rapid delivery over exhaustive pre- disbursement controls, a trade-off acknowledged in subsequent reviews. Early phases operated with reduced verification to meet urgent needs, after which agencies adapted by strengthening analytics, data matching, and referral processes. Even so, the volume of applications strained systems, and full implementation of enhanced safeguards came after substantial funds had already been distributed. Later estimates from the Small Business Administration itself placed likely fraud at a lower figure of around $36 billion, highlighting differences in methodology between the agency and its Inspector General. Regardless of the precise total, the existence of large-scale discrepancies has prompted continued enforcement and collection efforts. In evaluating how common such misuse appears to have been, the available data point to a material rather than marginal problem. Billions in taxpayer funds intended to preserve employment and business continuity instead became the subject of criminal inquiries, civil recoveries, and policy debates about future emergency responses. The Lawrence allegations, if proven, would illustrate one pathway in which loan proceeds could be redirected: through transfers that converted restricted business capital into personal liquidity for taxes, campaign support, and real estate obligations. Similar patterns of diversion appear in other prosecuted cases, though each rests on its own evidentiary record. Accountability mechanisms continue to operate through federal courts, Inspector General investigations, and interagency task forces. Defendants in related matters have faced sentences ranging from probation to multi-year imprisonment, along with restitution orders. Recovery of funds remains incomplete in many instances, as outstanding balances and complex financial trails complicate full restitution. For communities like Lawrence, the case also raises questions about local governance and public trust, separate from the federal charges themselves. City operations proceed under existing structures, and no allegations in the present matter involve municipal funds. The broader lesson from pandemic relief oversight centers on the tension between speed and integrity in crisis response. Programs that disburse large sums under compressed timelines inherently elevate fraud risk, particularly when relying on self- attestation. Subsequent improvements in data tools and inter-agency information sharing offer models for mitigating similar vulnerabilities in future emergencies. At the same time, the majority of recipients appear to have used funds consistent with program rules, sustaining businesses through an unprecedented disruption. The subset involving potential or confirmed misuse, however substantial in absolute dollars, must be weighed against the overall protective purpose of the initiative. As the DePena case advances through the judicial process, it will be adjudicated on the specific evidence presented. Parallel efforts to identify, prosecute, and recover from pandemic-related fraud elsewhere demonstrate that enforcement has not concluded with the formal end of the public health emergency. The volume of investigations still active years later attests to both the complexity of the financial flows and the persistence of oversight institutions. Whether the alleged conduct in Lawrence proves exceptional or reflective of wider patterns will depend on the ultimate findings of the court, yet the aggregate data already establish that diversion of relief funds was neither isolated nor negligible. Public officials charged with administering or benefiting from such programs face heightened scrutiny precisely because of the trust reposed in them. The dual roles of business owner and elected leader can create opportunities for conflict when personal financial pressures coincide with access to restricted capital. Clear separation of accounts and strict adherence to use limitations remain foundational safeguards, reinforced by the prospect of criminal liability for material misrepresentations. In this instance, the charges focus on certifications that funds would be applied solely to eligible business purposes, certifications that prosecutors contend were false. Looking across the landscape of COVID-era lending, the combination of official estimates, investigative outcomes, and recovery statistics supports the conclusion that misuse of the type alleged occurred at a scale warranting sustained attention. While precise quantification of proven fraud versus potential indicators continues to evolve with each new referral and conviction, the figures consistently place the problem well beyond anecdotal rarity. Effective deterrence for future programs will likely require balancing accessibility for legitimate applicants with robust, real-time verification capable of identifying anomalies before funds leave government accounts. The ongoing resolution of cases such as the one involving the Lawrence mayor contributes incrementally to that larger accounting. * Stay updated with the latest news, insights, and commentary—follow me on X for real-time updates and thoughtful discussions! Don’t miss out on the conversation! Support my run for State Representative - 9th Bristol District in Massachusetts Chester Tam Substack is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber. 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