Grandson Of John Gotti, Gets 15 Months In $1.1M COVID Fraud Case: Feds

CENTRAL ISLIP, NY — A Smithtown man and grandson of notorious Gambino crime boss John Gotti was sentenced Monday to prison for orchestrating a large-scale COVID-19 relief fraud scheme, federal prosecutors said.

Carmine Agnello, 39, was sentenced to 15 months in prison after pleading guilty to wire fraud in connection with a scheme that defrauded the U.S. Small Business Administration of approximately $1.1 million in Economic Injury Disaster Loan (EIDL) funds.

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Agnello was also ordered to pay $1,268,302 in restitution, serve two years of supervised release, and complete 100 hours of community service, prosecutors said.

“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,” United States Attorney Joseph Nocella Jr. said. “Our Office will continue to investigate and bring to justice those criminals who stole funds that were intended to assist legitimate businesses and their employees during a time of crisis.”

According to court filings and statements made during the case, Agnello fraudulently applied for and obtained at least three EIDL loans between April 2020 and November 2021.

Prosecutors said the loans were submitted on behalf of Crown Auto Parts & Recycling, LLC, a Jamaica, Queens-based business he operated. In the applications, Agnello provided false information about the number of employees and how the funds would be used.

Instead of supporting business operations as required under the program, authorities said Agnello diverted the funds for personal use — including investing approximately $420,000 into a cryptocurrency venture.

“Mr. Agnello defrauded a program designed to assist businesses and employees during the pandemic,” said Ketty Larco-Ward, inspector in charge of the U.S. Postal Inspection Service’s New York Division. “This investigation showcases the results that postal inspectors strive to achieve in collaboration with our law enforcement partners and the U.S. Attorney’s Office.”

The EIDL program was created as part of the federal CARES Act to provide emergency financial assistance to businesses affected by the COVID-19 pandemic.