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

Earlier today, in federal court in Central Islip, Carmine G. Agnello was sentenced by United States District Judge Nusrat J. Choudhury to 15 months in prison for defrauding the United States Small Business Administration (SBA) of approximately $1.1 million in loans awarded under the COVID-19 Economic Injury Disaster Loan (EIDL) program. Agnello was also ordered to pay restitution to the SBA in the amount of $1,268,302, serve two years of supervised release, and perform 100 hours of community service. Agnello pleaded guilty in September 2024 to wire fraud in connection with the scheme.

Joseph Nocella, Jr., United States Attorney for the Eastern District of New York, and Ketty Larco-Ward, Inspector in Charge, United States Postal Inspection Service, New York Division (USPIS) announced the sentence.

"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," stated United States Attorney Nocella. "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."

"Mr. Agnello defrauded a program designed to assist businesses and employees during the pandemic," stated USPIS Inspector in Charge Larco-Ward. "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 of the Eastern District of New York."

Congress created the EIDL as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Enacted on March 29, 2020, the CARES Act provided emergency financial assistance in connection with economic effects of the COVID-19 pandemic. One source of relief provided by the CARES Act was the EIDLP, which provided low-interest financing to small businesses, renters and homeowners in regions affected by declared disasters.

As set forth in court filings and on the record during the defendant's plea and sentencing hearings, between April 2020 and November 2021, during the height of the COVID-19 pandemic, Agnello fraudulently applied for, and received, at least three EIDLP loans totaling approximately $1.1 million, which he submitted on behalf of Crown Auto Parts & Recycling, LLC (Crown), a Jamaica, Queens-based business that he operated. In an effort to receive loans to which he was not entitled, Agnello submitted false information to the SBA about the number of employees who worked for Crown, as well as about the intended use of the loan proceeds. Instead of using the funds for Crown, Agnello diverted them for his personal use, including by investing approximately $420,000 in a cryptocurrency business.

The government's case is being handled by the Criminal Section of the Office's Long Island Division. Assistant United States Attorney Charles P. Kelly is in charge of the prosecution, with the assistance of Paralegal Specialist Samantha Schroder.

The Defendant:

CARMINE G. AGNELLO
Age: 39
Smithtown, New York

E.D.N.Y. Docket No. 24-CR-366 (NJC)