Carmine Agnello, grandson of mob boss John Gotti, was sentenced to 15 months in prison for defrauding the US government’s Covid relief funding system of $1.1 million, proceeds which he used to invest in cryptocurrencies, 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 multiple disaster relief loans from the government’s Small Business Administration (SBA) and used the funds in cryptocurrency investments.
Gotti’s grandson “deviant” [the proceeds] for his personal use, including investing approximately $420,000 in a cryptocurrency business,” the attorney’s office said.
The scammer, who will surrender to prison on July 1, submitted false information to the SBA between April 2020 and November 2021, claiming the proceeds were for his auto parts and recycling business in Queens, including employee salaries.
“During the height of the COVID-19 pandemic, the defendant shamefully lined his 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 Inspector in Charge of the United States Postal Inspection Service, New York Division (USPIS), Larco-Ward.
Agnello is not the only individual who has defrauded the government’s Covid relief fund. Among several cases that ended up in court, stands out that of Bruce Choi, who illegally obtained $2 million in pandemic-related business loans on behalf of non-existent companies and used the money to purchase cryptocurrencies through Kraken. David T. Hines fraudulently obtained $3.9 million in similar relief funds and used part of the proceeds to purchase a Lamborghini.
According to statistics from the US Government Accountability Office (GAO), fraud against Covid-related relief funds was rampant, with approximately $135 billion, or up to 15% of total funds, lost to scams.
Agnello’s grandfather wielded power with brutal violence and enjoyed public attention. He took over Gambino and ran companies that authorities said earned him approximately $500 million a year from ventures that included union racketeering, illegal gambling, loan sharking and stock fraud. In 1992, Gotti was convicted of 13 criminal charges and sent to federal prison, where he died of cancer at age 61.
