Carmine Agnello, the grandson of mob boss John Gotti, has been sentenced to 15 months behind bars for a $1.1 million COVID-relief fraud that funneled pandemic aid into cryptocurrency investments, the U.S. Department of Justice said.
According to the U.S. Attorney’s Office for the Eastern District of New York, Agnello obtained multiple Small Business Administration (SBA) disaster loans between April 2020 and November 2021 by submitting false information that the money would support an auto-parts and recycling business in Queens and pay employee salaries. Instead, prosecutors say he “diverted” the funds for personal use, including roughly $420,000 invested in a cryptocurrency business. The DOJ said Agnello must repay the stolen funds as part of his sentence; he is scheduled to surrender to begin his prison term on July 1.
“During the height of the COVID-19 pandemic, the defendant shamefully lined his own pockets with government and taxpayers’ dollars,” U.S. Attorney Joseph Nocella said in the DOJ statement. The U.S. Postal Inspection Service’s New York Division also emphasized that Agnello targeted a program intended to support struggling businesses and their workers.
The case is one of several high-profile prosecutions tying pandemic-relief fraud to crypto purchases and services. Prosecutors previously charged individuals such as Bruce Choi, who allegedly obtained about $2 million in pandemic loans for fictitious companies and used the cash to buy cryptocurrency through Kraken, and David T. Hines, who fraudulently secured $3.9 million and reportedly spent some of it on a Lamborghini.
Those prosecutions underscore a larger problem: the U.S. Government Accountability Office estimates that roughly $135 billion — as much as 15% of COVID-relief funds — may have been lost to fraud and error, a gap that bad actors often tried to mask by moving value into crypto channels.
The Gotti connection adds a high-profile twist. John Gotti led the Gambino crime family and, authorities said, ran enterprises that generated hundreds of millions annually from extortion, illegal gambling, loan-sharking and other schemes. He was convicted in 1992 on 13 criminal counts and later died in federal custody at age 61.
For the crypto sector, cases like Agnello’s highlight how digital assets can be used to convert and obscure illicit proceeds — and how law enforcement is tracking and prosecuting those pathways. Regulators and investigators have increasingly focused on exchanges, custody services and on-ramps as part of efforts to stem pandemic-era fraud and related money flows into crypto.
Read more AI-generated news on: undefined/news
