Carmine Agnello, the grandson of infamous Gambino crime family boss John Gotti, has been sentenced to 15 months in federal prison for fraudulently obtaining $1.1 million in COVID-19 relief funds and investing a portion of the proceeds in cryptocurrency. The sentence was handed down on March 15, 2025, and Agnello is ordered to turn himself in on July 1.
The U.S. Attorney's Office for the Eastern District of New York stated that between April 2020 and November 2021, Agnello submitted false information to the Small Business Administration (SBA), claiming the Economic Injury Disaster Loans were needed for his auto parts and recycling business in Queens to cover employee salaries and operational expenses. Instead, he diverted approximately $420,000 of the stolen funds to invest in a cryptocurrency business.
"During the height of the COVID-19 pandemic, the defendant shamefully lined his own pockets with government and taxpayers’ dollars, which he must repay as part of today’s sentence," said United States Attorney Joseph Nocella. The investigation, a joint effort by the Secret Service, SBA Office of Inspector General, and the U.S. Postal Inspection Service, used a combination of traditional financial analysis and blockchain forensic tools to trace the illicit funds to cryptocurrency exchanges.
The case is part of a massive wave of pandemic-related fraud. According to the U.S. Government Accountability Office, roughly $135 billion—up to 15% of total relief funds—was lost to scams. The Justice Department's COVID-19 Fraud Enforcement Task Force has charged over 3,500 defendants since 2020.
Prosecutors highlighted that Agnello's case represents a modern evolution of financial crime, utilizing digital assets rather than traditional organized crime methods. The court ordered full restitution of $1.1 million and imposed three years of supervised release following imprisonment, emphasizing the need for deterrence given the widespread abuse of relief programs.
