Massachusetts state Rep. Francisco Paulino, a Democrat representing parts of Lawrence and Methuen, was indicted Wednesday on federal charges of wire fraud and money laundering in connection with an alleged scheme to fraudulently obtain over $700,000 in COVID-19 relief funds.
The 11-count indictment alleges Paulino used his tax preparation business, Madison Tax, to submit fraudulent applications for unemployment benefits and Economic Injury Disaster Loans between April 2020 and December 2021. Prosecutors say he filed a fraudulent unemployment claim in the name of a 77-year-old relative, resulting in approximately $44,000 in benefits. Additional allegations include diverting funds for personal expenses, real estate costs, loan payments, and transfers to his campaign account.
Federal prosecutors allege Paulino also lent portions of the funds to others at interest rates exceeding pandemic loan rates. The charges follow a broader crackdown on pandemic-related fraud in Massachusetts, including the recent arrest of Lawrence Mayor Brian DePeña on similar allegations.
Federal Response and Enforcement
U.S. District Attorney for Massachusetts Leah Foley announced the indictment at a Wednesday press conference, emphasizing the government’s commitment to prosecuting fraud involving pandemic relief programs. Foley stated, “We are dialed in and laser-focused on rooting out every bit we find. We will continue to hold fraudsters accountable until the stealing stops.”
Foley highlighted the case as part of a wider effort to combat fraud in programs such as SNAP, housing assistance, voter fraud, and pandemic relief. The arrest of Paulino, a sitting state legislator, underscores the scope of the alleged scheme, which prosecutors say involved multiple fraudulent applications and financial maneuvers.
Alleged Scheme Details
According to court documents, Paulino’s alleged fraudulent activities began in 2020, shortly after the federal government expanded pandemic relief programs. The indictment accuses him of:
- Filing false unemployment claims on behalf of others.
- Submitting altered or fraudulent loan applications under the Economic Injury Disaster Loan (EIDL) program.
- Diverting funds for personal and political use, including transfers to his campaign account.
Prosecutors allege that some of the diverted funds were loaned to third parties at higher interest rates than those permitted under pandemic relief programs. The scheme is said to have continued through December 2021, spanning nearly two years.
Related Cases and Broader Context
Paulino’s indictment comes less than two weeks after Lawrence Mayor Brian DePeña was arrested on charges of fraudulently obtaining more than $1.5 million in COVID-19 small-business loans. DePeña, also a Democrat, is accused of diverting funds to personal debts and his political campaign. His arraignment date has not yet been set.
Federal authorities have framed both cases as part of a broader effort to combat fraud in pandemic relief programs, which saw unprecedented levels of funding distributed nationwide. The cases also reflect increased scrutiny on public officials who may have exploited their positions for personal gain during the pandemic.
Next Steps and Legal Process
Paulino, who has not yet entered a plea, is scheduled to appear in federal court for arraignment. If convicted, he faces significant penalties, including prison time, fines, and restitution. The case is being handled by the U.S. Attorney’s Office for the District of Massachusetts and federal law enforcement agencies.
The investigation remains ongoing, with authorities indicating that additional charges or arrests related to pandemic fraud in Massachusetts are possible.