PEABODY — A Peabody man has been arrested by federal agents on charges that he had set up a methamphetamine lab inside the Holiday Inn on Route 1 last summer, a lab that was discovered after an explosion in a hotel room.

Joseph Penachio, 35, was arrested on Lynn Street early yesterday morning by a team that included federal agents, Peabody police and a SWAT team from the North Eastern Massachusetts Law Enforcement Council.

He was charged in an indictment last week with attempting to manufacture methamphetamine, endangering human life while doing so and possession of precursor chemicals with the intent to manufacture methamphetamine.

The investigation was touched off by an explosion that happened in Room 119 of the Holiday Inn and Suites on Route 1, near the junction of Routes 128 and 95, on July 29, 2012.

Nearly 200 guests, including 25 children, and employees were evacuated from the hotel, where fumes were emanating from the room, police said at the time.

Investigators found indications that the room was being used as a meth lab, and a team from the Drug Enforcement Administration’s clandestine lab enforcement team opened an investigation.

If convicted, Penachio could face up to 40 years in prison and $1.5 million in fines. Prosecutors are also seeking forfeiture of any assets Penachio may have that are linked to the alleged crimes.

Penachio made an initial appearance in U.S. District Court in Boston yesterday afternoon, where he pleaded not guilty to the charges. He is scheduled to be back in court today for a detention hearing in the case.

Courts reporter Julie Manganis can be reached at 978-338-2521, via email at or on Twitter @SNJulieManganis.

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