A Smithtown man collected more than $1 million in federal relief money. The money was meant to support small businesses during the Covid-19 pandemic; he used it to invest in cryptocurrency.
Carmine Agnello, who carried out the Covid fraud for over a year, pleaded guilty in federal court yesterday to wire fraud. He faces up to 30 years in prison, a restitution of more than $940,000, and a fine of up to $2.2 million.
“The defendant shamefully used the public health and economic crisis of the Covid-19 pandemic as an opportunity to line his pockets with stolen funds,” said United States Attorney Breon Peace in a statement.
“The reality is, those who engaged in blatant theft of taxpayer dollars intended to assist legitimate businesses and their employees during the Covid-19 pandemic should know that despite the passage of time, there is no free pass for their crimes and they will be vigorously prosecuted by the Office.”
From April 2020 to November 2021, Agnello engaged in a Covid fraud to receive money that was meant to support small businesses. In the wake of Covid-19’s onset, the Economic Injury Disaster Loan Program (EIDLP) was created to provide long-term, low-interest loans for small businesses, renters and homeowners affected by the pandemic.
How much financial assistance a business would receive was determined by their typical revenue, and that money was then given out by the Small Business Administration (SBA), which ran the EIDPL.
Agnello submitted three applications for loans, lying in each of them, on behalf of his business, Crown Auto Parts & Recycling, court documents say. His Covid fraud earned him around $1.1 million.
In his loans, Agnello falsely claimed that his business had three employees, prosecutors say. In order to pull off the Covid fraud, Agnello said he did not have a criminal record — another intentional lie to manipulate the SBA, prosecutors say, as loans were only given to those without criminal records, but Agnello had previously been convicted of a misdemeanor.
Thirdly, Agnello lied about how he intended to use the $1.1 million he received as part of his Covid fraud. The money was meant to relieve small businesses in distress. Instead, he used it for his personal financial gain — including investing around $420,000 in cryptocurrency, court documents say.
“Agnello allegedly used over $1 Million in Covid relief funds for his own financial gain,” said Daniel Brubaker, U.S. Postal Service Inspector in Charge, in a statement. “(That was) government money that was intended to assist struggling businesses during the Covid-19 pandemic.
“Postal Inspectors will relentlessly pursue any individuals who scheme to defraud the government and steal taxpayer funds,” he added. “We, along with our law enforcements partners, will not end this pursuit of justice until those who take advantage of the U.S. Mail to commit fraud are held fully accountable. Today’s guilty plea is proof of that fact.”
Agnello was released on a $500,000 bond. He has yet to be sentenced.
