State Rep. Francisco Paulino was indicted and arrested on charges of pandemic benefit fraud early Wednesday, the U.S. Attorney’s Office announced, becoming the second Massachusetts public official to face the COVID-related fraud allegations in less than two weeks.

“We have arrested Massachusetts State Rep. Francisco Paulino, who represents the 16th Essex District, which includes the cities of Lawrence and Methuen, for pandemic unemployment insurance fraud, pandemic loan fraud, and money laundering,” said U.S. Attorney for the District of Massachusetts Leah Foley. “He is charged in an 11-count indictment that was unsealed today.”

Paulino, 46, was taken into federal custody by the FBI early Wednesday morning and arraigned in the afternoon on eight counts of wire fraud and three counts of money laundering. Federal officials allege he schemed to profit from $700,000 fraudulently obtained from pandemic-related relief funds starting in April 2020.

Paulino is a Democrat whose district includes parts of Lawrence and Methuen.

The public official pleaded not guilty to all charges in the federal John Joseph Moakley Courthouse during his arraignment. He was released under conditions of suspending his business allegedly involved in the criminal activity, Madison Tax, and not traveling beyond New Hampshire and Massachusetts.

The charges come less than two weeks after Lawrence Mayor Brian DePena, representing much of the same area as Paulino, was arrested on fraud and money laundering accusations involving over $1.5 million in pandemic relief funds. Asked if the two were connected, Foley said, “Anything that has to do with the relationships between the cases or the individuals just is not public yet.”

“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,” Foley said. “Other money he flipped around and lent to other individuals at higher interest rates than the pandemic loan rate, basically making more money for himself at the expense of others.”

Paulino’s alleged fraud began in April of 2020 before the defendant was a state representative – he was elected in November 2021 – when he ran two businesses, Madison Tax and Madison Mortgage. At that point, the indictment alleges, Paulino first fraudulently filed for pandemic unemployment assistance benefits in the name of an “unwitting” 77-year-old relative.

Those benefits, which Paulino allegedly collected himself, totaled over $44,000.

The prosecutors argue the defendant continued to use false information to rake in around $700,000 from there, including economic injury disaster loans for his and others’ businesses. In doing so, FBI Boston special agent in charge Ted Docks said, he “betrayed the trust of some of those closest to him” and treated “the COVID-19 pandemic as (his) own personal cash cow.”

“The FBI’s message today is clear: emergency circumstances do not suspend the rule of law, and public service is not a shield from accountability,” Docks said. “We want you to know that our investigation is active and ongoing, and anyone with information on this type of fraud occurring at any level, we’re asking you to share what you know with the FBI.”

Paulino will return to court on Oct. 10 for an initial status conference.

US Attorney Leah Foley speaks on the arrest of state Rep. Francisco Paulino for alleged pandemic benefit fraud. (Matt Stone/Boston Herald).