New York man sentenced to prison for $1 million COVID-19 fraud following HSI task force investigation

NEW YORK - A Homeland Security Investigations New York task force investigation, executed in partnership with the U.S. Postal Inspection Service, has landed a Smithtown man 15 months in prison for defrauding the Small Business Administration of approximately $1.1 million in loans awarded under the COVID-19 Economic Injury Disaster Loan program.

U.S. District Judge Nusrat J. Choudhury ordered Carmine Gotti Agnello, 39, to serve one year and three months in prison followed by two years of supervised release. Choudhury also ordered Agnello to pay $1,268,302 in restitution to the SBA and perform 100 hours of community service.

"By fraudulently obtaining more than a million dollars in disaster relief loans and diverting those funds - including hundreds of thousands of dollars into cryptocurrency investments - the defendant misappropriated resources intended to keep legitimate businesses and their employees afloat during the COVID-19 pandemic," said HSI New York acting Special Agent in Charge Michael Alfonso. "HSI New York worked in close coordination with the U.S. Postal Inspection Service and the U.S. Attorney's Office for the Eastern District of New York to uncover and dismantle this scheme. HSI remains steadfast in its commitment to investigating fraud and bringing to justice the criminal opportunists who seek to exploit federal relief programs at the expense of honest business owners and American taxpayers."

This investigation was led by HSI New York and the USPIS New York Division, in close coordination with the U.S. Attorney's Office for the Eastern District of New York.

Between April 2020 and November 2021, during the height of the COVID-19 pandemic, Agnello fraudulently applied for and received at least three Economic Injury Disaster loans totaling approximately $1.1 million, which he submitted on behalf of Crown Auto Parts & Recycling LLC, a Jamaica, Queens-based business he operated. Agnello submitted false information about the number of employees working for Crown and how he intended to use the money. Instead of using the funds for Crown, Agnello used them for himself, including by investing approximately $420,000 in a cryptocurrency business.

Learn more about this case on Justice.gov.