Carmine Agnello, the grandson of mob boss John Gotti, was sentenced to 15 months in prison for defrauding the US government’s Covid relief funding system out of $1.1 million, proceeds which he used to invest in crypto, the Justice Department said.
In a statement released Monday, the U.S. Attorney’s Office for the Eastern District of New York said Agnello fraudulently obtained several disaster relief loans from the government’s Small Business Administration (SBA) and used the funds for cryptocurrency investments.
Gotti’s grandson “derived [the proceeds] for his personal use, including by investing approximately $420,000 in a cryptocurrency business,” the attorney’s office said.
The fraudster, who will surrender himself to prison on July 1, submitted false information to the SBA between April 2020 and November 2021, stating that the proceeds were for his parts and recycling business in Queens, including for employee wages.
“During the height of the COVID-19 pandemic, the defendant shamefully lined his own pockets with government and taxpayer dollars, which he must repay as part of today’s sentencing,” said U.S. Attorney Joseph Nocella.
“Mr. Agnello defrauded a program designed to help businesses and employees during the pandemic,” said United States Postal Inspection Service, New York Division (USPIS) Inspector Larco-Ward.
Agnello is not the only person to have defrauded the government’s Covid relief fund. Among several cases that ended up in court, Bruce Choi stands out when he illegally obtained $2 million in pandemic-era business loans on behalf of non-existent companies and used the money to buy cryptocurrency through Kraken. David T. Hines fraudulently obtained $3.9 million from similar relief funds and used some of the proceeds to buy a Lamborghini.
Based on statistics from the US Government Accountability Office (GAO), fraud against Covid-related relief funds was rampant, with about $135 billion, or up to 15% of total funds, lost to fraud.
Agnello’s grandfather wielded power with brutal violence and enjoyed the limelight. He took over Gambino and ran businesses that authorities claimed earned him about $500 million a year from ventures that included union racketeering, illegal gambling, loan sharking and stock fraud. In 1992, Gotti was found guilty of 13 criminal counts and sent to federal prison, where he died of cancer at the age of 61.
