Massachusetts state Representative Francisco Paulino, a Dominican-born lawmaker representing the 16th Essex District, has been released under conditions after being accused by the FBI of wire fraud and money laundering related to the alleged fraudulent use of COVID-19 relief funds.
Paulino, 46, was arrested by federal authorities on August 26 and accused of fraudulently obtaining more than $700,000 in unemployment benefits and small-business loans during the pandemic.
Federal prosecutors allege that Paulino used some of the money obtained through the loans to finance real estate operations and provide loans to clients of his mortgage business before he was elected to public office.
Paulino faces eight counts of wire fraud and three counts of money laundering. Wire fraud charges carry a potential sentence of up to 20 years in prison each, while money laundering charges carry up to 10 years each if convicted.
The federal investigation reportedly began about three years ago. Paulino, a Democrat who represents Lawrence and Methuen, appeared before a federal judge on the day of his arrest and pleaded not guilty to all 11 charges.
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Paulino was released under conditions and is prohibited from traveling outside Massachusetts and New Hampshire. He may travel to Washington, D.C., where his attorney is based, only with court authorization.
The judge also ordered the temporary suspension of operations at his businesses, including Madison Mortgage, which was already closed, and Madison Tax, which remained open. Both companies are mentioned in the federal investigation.
According to the federal indictment, Paulino allegedly obtained Pandemic Unemployment Assistance, or PUA, benefits in 2020 and 2021 in the name of a 77-year-old relative who prosecutors say was unaware of the arrangement.
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Paulino is scheduled to return to federal court on October 10 for a hearing on the status of his case
