A Smithtown man is heading to federal prison for 15 months after prosecutors said he pulled in roughly $1.1 million in COVID-19 disaster loans, then funneled a big chunk of the cash into personal investments instead of helping his business ride out the pandemic. Federal court records show the money came through the Small Business Administration’s Economic Injury Disaster Loan program.
What prosecutors 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,” the U.S. Attorney’s Office wrote on X, announcing the sentence and crediting the Postal Inspection Service for investigative support. The office posted the announcement with the U.S. Postal Inspection Service, according to U.S. Attorney EDNY on X.
Case details and sentence
Court filings show Carmine G. Agnello, 39, applied for and received at least three Economic Injury Disaster Loans totaling about $1.1 million on behalf of Crown Auto Parts & Recycling in Jamaica, Queens, while inflating employee counts and misrepresenting how the money would be used. Prosecutors say Agnello diverted the funds for personal use, including investing roughly $420,000 in a cryptocurrency business, and he pleaded guilty in September 2024.
As reported by the U.S. Attorney's Office, Eastern District of New York, a federal judge sentenced Agnello to 15 months in prison, ordered him to pay $1,268,302 in restitution to the SBA, and imposed two years of supervised release along with 100 hours of community service.
Why it matters
The case is one small slice of a broader, multi-agency crackdown on pandemic-relief fraud aimed at clawing back taxpayer money that was supposed to keep legitimate employers afloat. “The Department of Justice will use every available federal tool, including criminal, civil, and administrative actions, to combat and prevent COVID-19 related fraud,” the Department said when it announced its COVID-19 fraud task force, according to the Department of Justice.
The prosecution was handled by the Long Island Division of the U.S. Attorney’s Office, with Assistant U.S. Attorney Charles P. Kelly leading the case, according to the office’s release. The EDNY statement also quoted Ketty Larco‑Ward of the U.S. Postal Inspection Service as saying the investigation “showcases the results” of inspectors working closely with law enforcement partners, per the same release.
