BOSTON, Mass.- Methuen state representative Francisco Paulino was arrested after being indicted on federal charges alleging he fraudulently obtained COVID-19 relief funds and directed money to his personal and business bank accounts.
Paulino, who represents the 16th Essex District, faces eight counts of wire fraud and three counts of unlawful monetary transactions in federal court in Massachusetts, according to the indictment.
Prosecutors allege the scheme took place from about April 2020 through at least December 2021 and involved Madison Tax, a business associated with Paulino.
According to the indictment, Paulino allegedly filed a fraudulent unemployment claim for $44,160 in a relative’s name and submitted or modified Economic Injury Disaster Loan applications involving his businesses and a client.
Prosecutors also allege Paulino took advantage of a Lawrence laundry-business owner with limited English who had trusted him with tax matters, personal information and online banking access.
The indictment alleges Paulino obtained an EIDL modification without the client’s knowledge. Prosecutors further allege that Paulino later sought a $200,000 loan from the client, which was transferred to Madison Tax and allegedly used toward a Lawrence mortgage.
In another allegation, prosecutors say Paulino overstated revenue to obtain an EIDL for Jackson Enterprise, which operated Lawrence Heav’nly Donuts. The indictment alleges that $18,000 was later moved toward a Lawrence real estate purchase.
Prosecutors also allege that EIDL funds obtained through Madison Tax were transferred to Madison Mortgage and used toward mortgages connected to property purchases in Methuen and Lawrence.
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