Grandson of Mob Boss John Gotti Sentenced for Funneling Stolen COVID Funds Into Crypto

In brief

• Carmine G. Agnello has been sentenced to 15 months in federal prison and ordered to repay $1.27M after defrauding the SBA's COVID-19 EIDL program.
• Agnello, the grandson of Gambino boss John Gotti, submitted false loan applications for Crown Auto Parts & Recycling, overstating employee numbers and misrepresenting the use of funds.
• He diverted roughly $420,000 of the $1.1M haul into a crypto business rather than the legitimate business purposes he had claimed. The grandson of one of America’s most notorious crime figures has been sentenced to prison after he siphoned pandemic relief funds into crypto investments, an outcome experts say points to a pattern of opportunistic fraud during COVID-era aid programs. Carmine G. Agnello, grandson of John Gotti, the former boss of the Gambino crime family, was sentenced to 15 months in prison for defrauding the Small Business Administration (SBA) of roughly $1.1 million through the Economic Injury Disaster Loan (EIDL) program, according to a statement from the U.S. Attorney’s Office for the Eastern District of New York.

Long Island Man Sentenced to Prison for $1 Million Covid-19 Fraud

— US Attorney EDNY (@EDNYnews) April 20, 2026 Prosecutors said he diverted about $420,000 of those funds into a crypto business instead of using the money to support his company. He pleaded guilty in September 2024 to wire fraud and was also ordered to pay $1,268,302 in restitution, serve two years of supervised release, and complete 100 hours of community service. Between April 2020 and November 2021, Agnello fraudulently applied for at least three Economic Injury Disaster Loans through his Jamaica, Queens-based business, Crown Auto Parts & Recycling, LLC, submitting false information about employee headcount and intended use of funds, according to the statement. The SBA's Office of Inspector General has estimated that more than $200 billion in potentially fraudulent loans were disbursed through COVID relief programs, with around $136 billion tied to EIDL alone.

Crypto’s open door

Experts told *Decrypt* that Agnello's case reflects a structural vulnerability baked into emergency relief design. "The government prioritized speed, relaxed controls, and created what investigators have described as a kind of pay-now-chase-later environment," cybercrime consultant David Sehyeon Baek said. "Money was pushed out fast, and serious verification often came much later." Isabella Chase, Head of Policy, EMEA at TRM Labs, called pandemic programs "among the most significant fraud vectors we have observed in recent years." Both experts pointed to how weak verification enabled the crypto pivot. "The combination of unprecedented speed of disbursement, relaxed verification requirements, and the rapid maturation of crypto markets created a near-perfect storm," Chase told *Decrypt*. Last month, federal prosecutors charged Los Angeles rideshare driver Bruce Choi with wire fraud and money laundering after he allegedly for a fictional company called Premier Republic and wired the proceeds to crypto exchange Kraken. In October, a rural after securing two COVID Bounce Back loans and directing a portion toward crypto investments and gambling, when only one loan was permitted.