Dean Tran, former state senator from Fitchburg, accused of COVID-19 fraud

Former Fitchburg state Sen. Dean Tran was arrested Friday on COVID-19 fraud charges, with authorities alleging he hid legitimate income in order to qualify for $30,120 in pandemic unemployment benefits.

Tran was indicted on 25 counts of wire fraud and three counts of filing false tax returns, according to the office of Acting United States Attorney Joshua S. Levy.

He pleaded "absolutely not guilty" Friday afternoon during a brief appearance in U.S. District Court, Boston, before Magistrate Judge Page Kelley.

Tran, who was accompanied by his wife and four children, was released and allowed to keep his passport, which will allow him and his family to travel for a vacation in Aruba starting Saturday.

His next court hearing is Jan. 11.

In a separate case, dating to his time on Beacon Hill, Tran faces charges of violating state ethics laws. He is accused of having his Senate staff campaign for him on state time.

Tran, 48, a Republican, served in the state Senate through 2020, when he lost a reelection bid. In 2022, he ran unsuccessfully for the U.S. House of Representatives seat held by Rep. Lori Trahan.

In the COVID-19 fraud case, authorities allege that Tran made $50,000 as a consultant for an automotive parts company, in addition to "thousands of dollars" in income from his Fitchburg rental properties.

Prosecutors say he concealed the consulting and rental income on his 2021 federal income taxes.

“Dean Tran was once elected to serve taxpayers, but today we arrested him for allegedly cheating them out of tens of thousands of dollars in fraudulent unemployment benefits that were meant to be a lifeline for those struggling for survival as a result of the pandemic,” Jodi Cohen, special agent in charge of the FBI Boston Division, said in a statement. “This former state senator allegedly made the conscious decision to repeatedly lie about his employment status and underreport his rental property income so he could get a tax break. The FBI and our partners are working hard every day to shut down such fraud schemes and protect the public from being fleeced.”

In June, a team of FBI agents executed a search warrant at Tran's Fitchburg house. At the time, his lawyer indicated the search was unrelated to the ongoing state case against Tran.

In another case, Tran is accused of intimidating an elderly constituent in June 2019 into selling him her late husband’s firearms. Tran pleaded not guilty and announced a lawsuit against the attorney general at the time, Maura Healey, alleging that the charges were brought for political purposes and that Healey was trying to suppress Asian American voices. The lawsuit was dismissed.

Federal prosecutors allege in the indictment that Tran submitted an online application for state unemployment insurance benefits on Jan. 6, 2021, the day after his Senate tenure ended, but that his application was denied by the state because legislators are not eligible for the benefits under state law.He accepted a consulting position with the automotive parts company on March 14, 2021, and the very next day applied for unemployment benefits through the Pandemic Unemployment Assistance program retroactive to Jan. 9, 2021, allegedly checking a box "stating that he was unemployed, partially unemployed or unable or unavailable to work." His application was accepted March 16, 2021.

In April, the Massachusetts Division of Unemployment Assistance denied Tran's pandemic unemployment claim due to an issue related to "employment substantiation" and stopped payments to him. Tran appealed the decision and submitted what the feds called a "sham employment offer letter" backdated to Dec. 29, 2020, purporting to be from the CEO of a New Hampshire-based company that produces and distributes Asian foods. The letter allegedly offered Tran a job and a $120,000 annual salary.During an appeal hearing in May 2021, Tran allegedly made misleading statements and concealed the fact that he had been working for the auto parts company. In June 2021, the state reversed its decision and declared Tran eligible for pandemic unemployment benefits "beginning the week ending January 2, 2021, and indefinitely thereafter, if otherwise eligible."His benefits were terminated after the week ending Sept. 4, 2021, and Tran became a W-2 employee of the auto parts company on Sept. 20, 2021, according to the indictment."If TRAN had become a W-2 employee of the Automotive Parts Company prior to September 2021, however, TRAN's wages would have been reported to the state and, thus, the DUA would have disqualified TRAN from receiving PUA benefits. By remaining as a consultant for the Automotive Parts Company until early September 2021, TRAN was able to conceal his employment from the DUA while he simultaneously collected both pay from the Automotive Parts Company and PUA benefits," the indictment says.From March through December 2021, the feds allege, Tran collected $43,925 in pandemic unemployment benefits while also being paid $82,602 by the auto parts company.

With reports from Colin A. Young and Chris Lisinski of State House News Service.

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