Carmine Agnello, the grandson of mob boss John Gotti, has been sentenced to 15 months in prison for defrauding the U.S. government’s COVID-19 relief funding system of $1.1 million, using the proceeds to invest in cryptocurrency, the U.S. Department of Justice said.
The U.S. Attorney’s Office for the Eastern District of New York said in a statement released on Monday that Aniello fraudulently obtained multiple disaster relief loans from the government’s Small Business Administration (SBA) and used the funds for cryptocurrency investments.
Gotti’s grandson changes career [the proceeds] for his personal use, including investing approximately $420,000 in cryptocurrency businesses,” the attorney’s office said.
The fraudster, who will turn himself in to jail on July 1, submitted false information to the SBA between April 2020 and November 2021, claiming that the proceeds were used for his auto parts and recycling business in Queens, including employee wages.
“During the height of the COVID-19 pandemic, the defendant shamefully enriched himself with government and taxpayer dollars, which he must repay as part of today’s sentence,” said U.S. Attorney Joseph Nocella.
“Mr. Aniello defrauded a program designed to help businesses and employees during the pandemic,” said Inspector in Charge Lacko-Ward of the United States Postal Inspection Service, New York Division (USPIS).
Agnello isn’t the only one defrauding government COVID-19 relief funds. Of several cases that ended up in court, that of Bruce Choi, who illegally obtained $2 million in pandemic business loans on behalf of non-existent companies and used the money to purchase cryptocurrency through Kraken, stands out. David T. Hines fraudulently obtained $3.9 million from similar relief funds and used some of the proceeds to purchase a Lamborghini.
According to statistics from the U.S. Government Accountability Office (GAO), fraud in COVID-19-related relief funds is rampant, with approximately $135 billion (about 15% of total funds) lost to fraud.
Agnello’s grandfather wielded power with ruthless violence and enjoyed the spotlight. He took over the Gambino family and ran businesses that authorities said earned him about $500 million a year, including union extortion, illegal gambling, loan sharking and stock fraud. In 1992, Gotti was convicted of 13 criminal counts and sent to federal prison, where he eventually died of cancer at the age of 61.