Gotti grandson gets 15 months for COVID EIDL crypto fraud

Carmine Agnello, the grandson of former Gambino boss John Gotti, received a 15-month federal prison term after pleading guilty to wire fraud for obtaining roughly $1.1 million through the Small Business Administration’s Economic Injury Disaster Loan (EIDL) program and diverting about $420,000 of those funds to a cryptocurrency business. The court also ordered $1,268,302 in restitution, two years of supervised release and 100 hours of community service.

Federal filings say the fraudulent activity occurred between April 2020 and November 2021 through Crown Auto Parts & Recycling LLC, a Jamaica, Queens–based company. Prosecutors allege Agnello filed at least three EIDL applications that overstated employee counts and misrepresented how the loan money would be used, securing roughly $1.1 million in pandemic relief funds.

Court records show about $420,000 of the funds were routed to a cryptocurrency business instead of being spent on the business expenses listed in the loan applications. Officials treated the case as a wire-fraud prosecution; no racketeering or money-laundering charges were filed in the matter.

Agnello entered his guilty plea in September 2024. His attorney told the court that Agnello struggles with a gambling addiction and mentioned his upbringing, including appearances on the reality show Growing Up Gotti, as context the defense asked the judge to consider.

Cybercrime consultant David Sehyeon Baek described the pandemic-era rollout of relief as a ‘pay-now-chase-later’ environment, saying rapid disbursement and relaxed verification created openings for fraud. Isabella Chase, head of policy at a blockchain analytics firm, described pandemic relief programs as major fraud vectors and said the speed of payments combined with weak checks made it easier for some borrowers to move funds into cryptocurrency.

Federal prosecutors have recently pursued other cases in which loan proceeds were directed to digital-asset accounts. Authorities charged a Los Angeles rideshare driver with obtaining more than $2 million in COVID loans and moving funds into cryptocurrency exchanges. Courts abroad have also sentenced borrowers who used emergency business loans to buy crypto and place bets.

The SBA’s Office of Inspector General has estimated more than $200 billion in potentially fraudulent loans across COVID relief programs, with about $136 billion linked to the EIDL program alone.

Analysts noted the Eastern District of New York declined to pursue RICO or money-laundering counts in Agnello’s case, an omission observers flagged given the district’s history with cases connected to the Gambino family.

The restitution order requires full repayment of the funds Agnello obtained. The case joins a series of prosecutions that involve allegations of pandemic relief funds being diverted into cryptocurrency channels.