A federal judge sentenced Carmine Agnello, grandson of late Gambino crime boss John Gotti, to 15 months in prison for siphoning over $1 million in COVID-19 relief funds. He diverted $420,000 of the haul into a cryptocurrency business.
Judge Nusrat Choudhury delivered the sentence on April 20 in federal court on Long Island. Prosecutors had initially sought 33 to 41 months.
How Pandemic Loans Became a Crypto Slush Fund
Agnello pleaded guilty in September 2024 to a single count of wire fraud. Between April 2020 and November 2021, he filed at least three fraudulent applications under the Small Business Administration’s Economic Injury Disaster Loan (EIDL) program, collecting $1.1 million.
The loans were tied to Crown Auto Parts & Recycling LLC, a company that had already ceased operations before Agnello secured most of the funds. He falsified employee counts, concealed prior convictions, and misrepresented how the money would be used.
Of the total, $420,000 was invested directly in a crypto venture. The case adds to a growing list of pandemic-era fraud schemes that funneled stolen government aid into digital assets.
Restitution and What Comes Next
Beyond prison time, Choudhury ordered Agnello to repay $1,268,302, perform 100 hours of community service, and undergo mental health treatment for gambling addiction.
He will serve two years of supervised release after incarceration. Agnello must report to prison by July 20.
U.S. Attorney Joseph Nocella Jr. condemned the scheme in a public statement.
“During the height of the COVID-19 pandemic, the defendant shamefully lined his own pockets with government and taxpayers’ dollars” he stated.
The SBA’s inspector general has flagged EIDL fraud as a persistent vulnerability, with billions in pandemic loans still under review.
Whether stricter controls will stem future cases involving crypto remains an open question.
