Massachusetts Rep. Francisco Paulino Indicted in $700,000 Pandemic Fraud Scheme

By Alex Chen

Federal prosecutors announced Wednesday that they have unsealed an 11-count indictment against Massachusetts state Representative Francisco Paulino, a Democrat, accusing him of wire fraud and money laundering for diverting over $700,000 in pandemic relief funds to his personal accounts, businesses, and campaign activities.

This makes Paulino the second Lawrence-area official charged in a federal COVID fraud case this month.

Paulino, who represents Massachusetts’ 16th Essex District covering parts of Lawrence and Methuen, was arrested Wednesday morning following a grand jury’s return of the indictment on Tuesday, according to court records.

He faces eight counts of wire fraud and three counts of unlawful monetary transactions.

U.S. Attorney Leah Foley for the District of Massachusetts stated that Paulino unlawfully obtained more than $700,000 in relief funds between April 2020 and December 2021, using some for personal real estate, loan payments, and campaign transfers while re-lending other portions at interest rates higher than the federal pandemic rate.

Prosecutors allege Paulino ran the scheme through Madison Tax LLC, a tax-preparation firm he founded in Lawrence, routing funds through other individuals’ identities and intermediaries.

The indictment claims Paulino filed a false pandemic unemployment claim in a relative’s name that yielded $45,000. He also misused Economic Injury Disaster Loans from the Small Business Administration — which provided low-interest working capital loans to businesses impacted by the pandemic.

In one instance, a Lawrence laundry owner with limited English allowed Paulino access to his tax records and online banking; Paulino allegedly secured a government loan for the client without their knowledge and then persuaded them into a $200,000 loan that was routed to Madison Tax LLC and applied to a mortgage on a Lawrence property.

In another case, prosecutors say Paulino overstated the revenue of a local donut shop operator to qualify for a disaster loan, directing approximately $18,000 of the proceeds toward real estate purchases.

The indictment follows two weeks after federal authorities arrested Lawrence Mayor Brian DePena, 61, on wire fraud and money laundering charges related to over $1.5 million in pandemic loans he allegedly diverted to his campaign, personal taxes, and high-interest mortgages.

A separate grand jury indictment against DePena was unsealed on the same day as Paulino’s.

Foley indicated that the two cases are unrelated, though both investigations began approximately three years ago.

Massachusetts House Speaker Ron Mariano described the charges as “extremely concerning” and stated that the chamber would monitor the case and take action if necessary, according to a statement reported by NBC Boston.

Paulino, a second-term Democrat first elected in 2022, is the second sitting Massachusetts Democratic state representative indicted this session after Rep. Chris Flanagan of Dennis was charged in April 2025 with wire fraud in an unrelated trade association scheme.

No attorney was listed for Paulino at the time of his arrest.