Carmine Agnello, the grandson of mob boss John Gotti, was sentenced to 15 months in prison for defrauding the US government’s Covid funding system of $1.1 million, which he used to invest in crypto, the Justice Department said.
In a statement Monday, the U.S. Attorney’s Office for the Eastern District of New York said Agnello fraudulently obtained multiple disaster relief loans from the government’s Small Business Administration (SBA) and used the funds in cryptocurrency investments.
Gotti’s grandson ‘hijacked’ [the proceeds] for his personal use, including investing approximately $420,000 in a cryptocurrency business,” the attorney’s office said.
The fraudster, who will report to jail on July 1, submitted false information to the SBA between April 2020 and November 2021, claiming the profits were intended for his auto parts and recycling business in Queens, including for his employees’ salaries.
“At 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 the sentence imposed today,” said U.S. Attorney Joseph Nocella.
“Mr. Agnello defrauded a program designed to help businesses and employees during the pandemic,” said Inspector-in-Charge Larco-Ward of the United States Postal Inspection Service, New York Division (USPIS).
Agnello is not the only individual to have defrauded the government’s Covid relief fund. Among several cases that ended up in court, that of Bruce Choi stands out because he illegally obtained $2 million in pandemic-related business loans on behalf of non-existent companies and used that money to purchase cryptocurrency through Kraken. David T. Hines fraudulently obtained $3.9 million from similar relief funds and used part of the proceeds to purchase a Lamborghini.
According to statistics from the U.S. Government Accountability Office (GAO), fraud against Covid-related relief funds was rampant, with an estimated $135 billion, or up to 15% of total funds, lost to scams.
Agnello’s grandfather wielded power with brutal violence and enjoyed attention. He took over Gambino, running businesses that authorities said earned him about $500 million a year through activities including extortion from unions, illegal gambling, loan sharking and stock fraud. In 1992, Gotti was convicted on 13 counts and sent to federal prison, where he died of cancer at age 61.
