A Massachusetts Democratic lawmaker faces an 11-count federal indictment for allegedly looting more than $700,000 in pandemic relief money, the second elected official in the state charged with COVID fraud this month.
Federal agents arrested State Rep. Francisco Paulino early Wednesday morning on charges of wire fraud and money laundering, capping a scheme that prosecutors say began in 2020 and ran through the end of 2021. Paulino, a Democrat representing the 16th Essex District covering Lawrence and Methuen, allegedly used his tax-preparation firm, Madison Tax LLC, to funnel pandemic unemployment benefits and federal disaster loans into personal accounts, real estate payments, and even his own campaign coffers.
U.S. Attorney Leah Foley laid out the allegations in blunt terms. The indictment charges Paulino with eight counts of wire fraud and three counts of unlawful monetary transactions, federal offenses that carry serious prison time if he is convicted.
The alleged fraud began in April 2020, at the height of pandemic shutdowns, when Paulino signed up for COVID relief funding on behalf of what prosecutors described as "an unwitting 77-year-old relative." That single fraudulent unemployment claim netted roughly $44,000 in benefits, the Washington Examiner reported. From there, prosecutors say, Paulino scaled the operation, routing money through Madison Tax using other people's identities to pull in a total exceeding $700,000 over roughly twenty months.
Foley told reporters that Paulino treated the stolen funds like a personal slush fund:
"According to the Paulino indictment, Mr. Paulino devised a scheme to obtain more than $700,000 in federal pandemic relief funds. It is alleged that Paulino used some of the money for his own personal use, including real estate expenses, loan payments and transfers to his campaign account."
But Paulino did not simply pocket the cash. Foley said he also ran a side lending operation, flipping pandemic loan dollars to other individuals at interest rates higher than the government's pandemic loan rate, profiting twice from money that was never his to begin with.
The scheme amounted to a sitting lawmaker allegedly using a crisis that devastated small businesses and working families as a vehicle for personal enrichment. Pandemic relief programs like unemployment insurance and disaster loans were designed to keep workers and businesses afloat during forced shutdowns. Prosecutors say Paulino hijacked those programs through identity fraud and false applications.
Massachusetts House Speaker Ron Mariano called the charges "extremely concerning" and said the chamber would monitor the case and act if needed. No further action by the state legislature has been announced.
Paulino's arrest did not happen in isolation. Roughly a week earlier, the FBI arrested Lawrence Mayor Brian DePeña on a separate 11-count federal indictment charging pandemic loan fraud and money laundering. DePeña, also a Democrat, allegedly began diverting public funds in 2020 while he was still serving on the Lawrence city council, before he became mayor.
Federal prosecutors said DePeña applied for pandemic relief funds on behalf of Tenares Tire Services Inc., his tire shop in Lawrence. The FBI arrested the sitting mayor on charges that he funneled $1.5 million in COVID relief into his mayoral campaign and personal debts.
Two elected Democrats in the same corner of Massachusetts, both allegedly stealing pandemic money, both indicted on the same number of counts, both accused of channeling taxpayer-funded relief into their political operations and personal finances. The pattern is hard to miss.
FBI Special Agent in Charge Ted Docks did not hold back about what the bureau found:
"Simply put, both men are accused of treating the COVID-19 pandemic as their own personal cash cows."
Foley framed the arrests as part of a broader federal crackdown on pandemic fraud, and she made clear that holding public office offers no protection. The Massachusetts Democratic Party has faced a string of legal embarrassments involving its officials in recent months.
Foley addressed the public directly in her remarks, connecting the alleged crimes to the real hardship that pandemic-era Americans endured:
"Everyone listening today knows how difficult it was for Americans during the pandemic. The money these two individuals allegedly scammed was meant for hardworking Americans and struggling business owners, not for two greedy individuals who lied and stole for their own personal benefit."
She added a pointed warning aimed at any official who might still be hoping the statute of limitations would run out before investigators came knocking.
"It is never a proud moment when we arrest a public official, but we will continue to do it until the message is received: No one is above the law, and no one gets a pass."
Foley also stated directly that federal investigators remain committed to pursuing every lead. "We are dialed in and laser-focused on rooting out every bit we find," she told reporters. "We will continue to hold fraudsters accountable until the stealing stops."
Paulino has not publicly commented on the charges. No information about his plea or legal representation has been released. The Fox News report confirmed Paulino is the second state politician charged with COVID-related fraud within the same month.
Strip away the legal language and the two cases share a depressingly familiar structure. Both men held public office. Both allegedly began stealing pandemic money in 2020, when the federal government was rushing billions out the door with minimal oversight. Both allegedly used small businesses or family members as fronts to access funds they were never entitled to receive. And both allegedly redirected stolen money into their political campaigns, the very campaigns that put them in positions of public trust.
DePeña used a tire shop. Paulino used a tax-preparation firm and, prosecutors allege, his own elderly relative's identity. The vehicles differed. The destination was the same: personal bank accounts, real estate deals, and campaign war chests.
Pandemic fraud has been a persistent problem nationwide since the first relief dollars went out in 2020. The Government Accountability Office and federal inspectors general have documented hundreds of billions in improper payments. But cases involving elected officials carry a particular sting. These are the people who voted to authorize emergency spending, who stood in front of cameras urging constituents to apply for help, and who were supposed to steward public resources, not steal them.
Paulino was photographed alongside Massachusetts Governor Maura Healey as recently as January 8, watching the governor sign healthcare legislation. Weeks later, federal agents were at his door.
The charges against both men remain allegations. Neither has been convicted. But the federal indictments are detailed, the dollar figures are large, and the U.S. Attorney's office has signaled that more cases may follow.
When public officials face arrest, voters deserve to know whether the institutions around them saw warning signs and looked the other way. In Lawrence and the 16th Essex District, those questions are just getting started.
Americans who played by the rules during the pandemic, who filed honest paperwork, waited months for checks, and watched their businesses shrink, deserve better than elected officials who allegedly treated emergency relief like a personal ATM. If the feds keep pulling on this thread in Massachusetts, no one should be surprised by what else they find.