Carmine Agnello — grandson of notorious Gambino boss John Gotti — was sentenced to 15 months in federal prison after a scheme that siphoned roughly $1.1 million in COVID-relief loans into personal use, including cryptocurrency investments, the U.S. Attorney’s Office for the Eastern District of New York announced.
Case details
- Agnello submitted false applications to the Small Business Administration between April 2020 and November 2021, claiming the funds were for his Queens auto-parts and recycling business and for employee payroll.
- Instead, investigators say he diverted the funds for personal use and “invested approximately $420,000 in a cryptocurrency business.”
- He must repay the stolen funds as part of the sentence and is scheduled to surrender to federal custody on July 1.
Officials’ reaction
- “During the height of the COVID-19 pandemic, the defendant shamefully lined his own pockets with government and taxpayers’ dollars, which he must repay as part of today’s sentence,” U.S. Attorney Joseph Nocella said.
- The U.S. Postal Inspection Service’s New York division noted Agnello “defrauded a program designed to assist businesses and employees during the pandemic.”
Broader context: pandemic fraud and crypto
- Agnello’s case joins a string of COVID-relief frauds where proceeds were routed into crypto. For example, Bruce Choi allegedly obtained $2 million in pandemic loans for fake companies and used the funds to buy cryptocurrency via Kraken, while David T. Hines is accused of taking $3.9 million from relief programs and using some proceeds to buy a Lamborghini.
- The U.S. Government Accountability Office has estimated that roughly $135 billion — as much as 15% of pandemic relief funds — was lost to fraud and improper payments, underscoring how widespread abuse of relief programs was.
A notorious family name
- The story attracts additional attention because of Agnello’s family connection: his grandfather John Gotti led the Gambino crime family and was convicted in 1992 on multiple charges. Authorities once estimated Gotti’s enterprises brought in hundreds of millions annually; he died in federal custody in 2002 at age 61.
Why it matters to crypto watchers
- While cryptocurrency itself isn’t inherently illegal, Agnello’s conviction is another example of how bad actors have funneled illicit proceeds into digital-asset ventures. Cases like this continue to draw scrutiny from law enforcement and regulators and highlight the ongoing AML and compliance challenges facing the crypto industry.
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