Frank V. Carone, a Brooklyn power broker and longtime close associate of former Mayor Eric Adams of New York, was arrested Wednesday on federal bribery and money laundering charges, along with his brother and a Queens developer.
An indictment unsealed Wednesday accuses Mr. Carone of using his influence while serving as chief of staff to the former mayor to steer an emergency shelter contract worth more than $6.8 million to the developer, Yan Po Zhu, in exchange for $120,000 in bribe payments.
The prosecutors said city officials repeatedly rejected efforts by Mr. Zhu, also known as Andy Zhu, to obtain a contract to shelter migrants at his hotel, the Microtel Inn by Wyndham in Long Island City, before Mr. Carone intervened.
The indictment, brought by prosecutors in the U.S. attorney’s office in Brooklyn, said Mr. Carone received the bribes through a law firm bank account controlled by his younger brother, Anthony C. Carone, who is also a lawyer.
In addition to bribery and money laundering, the 13-count indictment also includes charges of obstruction of justice, fraud and tax crimes. Prosecutors contend that Anthony Carone used the bribes to make personal credit card payments for Frank Carone and to transfer money to one of Frank Carone’s bank accounts.
Michael Considine, the first assistant U.S. attorney in Brooklyn, announced the indictment in a news release with the leaders of the New York F.B.I. and I.R.S. offices and the city’s Department of Investigation. He said that those charged had exploited the city’s migrant crisis for their own personal gain.
“The defendants engaged in a bribery scheme to secure a migrant shelter contract worth millions of dollars from a city agency funded in part by billions of federal dollars,” Mr. Considine said.
Two of Frank Carone’s lawyers, Russell Capone and Andrew Goldstein, said in a statement on Wednesday that Mr. Carone served the city honorably, calling a speedy trial “critical” and contending the facts would vindicate their client.
“We are confident that this prosecution is utterly misguided,” the statement said, adding that Frank Carone “was instrumental in helping the city navigate an unprecedented migrant crisis, but had absolutely nothing to do with granting the temporary migrant shelter at the center of these charges.”
A lawyer for Mr. Zhu, Stephen P. Scaring, said his client would enter a plea of not guilty “and is anxious to get to court and disprove these allegations.”
Katya Jestin, a lawyer for Anthony Carone, had no immediate comment, and John F. Carman, who represents Crystal Chen, a business manager for Mr. Zhu who was also arrested on Wednesday, could not immediately be reached for comment.
F.B.I. agents took Frank Carone, Anthony Carone and Mr. Zhu into custody at their respective homes early Wednesday morning, people with knowledge of the matter said.
Frank Carone and the others “devised and executed a scheme to exploit the city’s migrant crisis for profit,” prosecutors wrote in the indictment. They added that Frank Carone “agreed to accept a series of bribe payments” and “agreed to steer a multimillion-dollar emergency shelter contract to the Microtel owned by Zhu and managed by Chen.”
Frank Carone, 56, a lawyer and consultant, was a powerful force in Brooklyn politics as counsel to the local Democratic Party. He became a political mentor to Mr. Adams, aiding his rise from state senator to Brooklyn borough president and ultimately to City Hall, where Mr. Carone served as the mayor’s chief of staff.
He held that job for only a year, leaving office to start a consulting firm that traded in part on his access to Mr. Adams. After the mayor was himself indicted, Mr. Carone helped lead an ultimately successful effort to win the good graces of President Trump, whose Justice Department ultimately asked a judge to toss out the federal corruption charges against Mr. Adams.
The accusations against Frank Carone and the others grew out of the crisis that started in 2022 when more than 200,000 migrants began moving to New York City, and the government was required to house them under a decades-old “right-to-shelter” mandate.
As the city began renting hotels to house migrants, Mr. Zhu hired a consultant to seek an emergency contract from the city’s Department of Social Services for the Microtel, which had 75 rooms. But city officials responded that they already had several shelters in Long Island City — where community members opposed migrant housing — and refused Mr. Zhu’s requests.
Around the same time, in June 2022, Mr. Zhu cultivated a relationship with Frank Carone, then chief of staff to the mayor, inviting him to socialize at his home in Nassau County on Long Island, the prosecutors said.
The indictment included photos of the two men and others by a swimming pool in front of what appears to be a mansion and inside a wine cellar. The indictment said the photos were taken June 3, 2022; that evening, it said, Mr. Zhu texted Frank Carone asking for help obtaining a shelter contract.
As the officials overseeing the shelter program continued to resist Mr. Zhu’s entreaties, he continued to socialize with Mr. Carone and ask him to exert his influence, according to the indictment.
It described texts between the men: “My brother 29-12 40 Ave please help me get done we need to refinance,” Mr. Zhu wrote on Sept. 26, 2022, listing the Microtel’s address.
The next day, Anthony Carone texted Mr. Zhu, “I want to talk to you about LIC,” an apparent reference to the Long Island City hotel, the indictment said. A day later, Anthony Carone met Mr. Zhu at a Manhattan social club, and then the hotel owner visited Frank Carone at his home in the Mill Basin section of Brooklyn on Oct. 1, the prosecutors said.
Soon after, Mr. Zhu and Ms. Chen began making monthly payments to Frank Carone through a law firm bank account controlled by Anthony Carone, prosecutors said.
Later that fall, an official described in the indictment as “City Official #2,” the first deputy commissioner at the city’s Department of Homeless Services, emailed staff who had opposed giving a contract to Mr. Zhu with the Microtel’s address and contact information for Ms. Chen.
He wrote that the information had “come directly from the top …. I know it is in LIC, but we should assume it is approved.”
A few weeks later, the city’s contracting agency issued a letter of intent to award an emergency shelter contract for the Microtel that ultimately resulted in payments of more than $6.8 million, the indictment said.
Mr. Zhu and Ms. Chen described their $10,000 monthly bribe payments to the account controlled by Anthony Carone as legal fees, executing a “sham retainer agreement,” according to the indictment.
Anthony Carone did not inform his law partners that he was facilitating payments from Mr. Zhu through a law firm account and “funneling those payments” to Frank Carone in various ways, the indictment said.
Anthony Carone also used the account for payments from other clients Frank Carone had referred while he was Mr. Adams’s chief of staff. Anthony Carone sent most of that money to his brother as well, the prosecutors said.
The indictment said that both Carone brothers instructed Frank Carone’s personal assistant to transfer money from the law firm account to pay Frank Carone’s credit card charges for travel, dining, fitness memberships, clothing and other personal items. At that time, neither Frank Carone nor the assistant were affiliated with the firm, the indictment said.
After Frank Carone resigned as chief of staff to the mayor, Anthony Carone sent money from his law firm’s account to an account his brother had at a different law firm.
Frank and Anthony Carone were also accused of failing to report the payments from Mr. Zhu and the other client payments as income to the I.R.S.
In 2024, after learning they were under investigation, the brothers drafted a backdated loan agreement from Anthony Carone to Frank Carone in an effort to explain the payments, later providing the document to federal investigators, the indictment said.
Earlier this year, when the investigation was first disclosed, Frank Carone issued a statement denying wrongdoing. He ascribed any scrutiny of his conduct to his political associations, jealousy over his success and “stereotypical assumptions” based on his Italian American roots and Brooklyn upbringing.
“Baseless accusations are nothing new to me,” he said at the time.
Like other of Mr. Adams’s former aides, Mr. Carone now faces legal jeopardy even as the former mayor moves on with his life. A spokesman for Mr. Adams issued a statement Wednesday morning defending the former mayor’s chief of staff.
“Frank Carone has dedicated decades of his life to public service, the legal profession and helping countless individuals, businesses and charitable organizations throughout New York,” the spokesman, Todd Shapiro, said in the statement. “This is an ongoing legal matter, and my prayers are with his family.”
The Carone investigation was one among nearly a dozen federal and state corruption inquiries focused on members of the mayor’s inner circle or his associates — in addition to the since-dismissed indictment of Mr. Adams himself.
Not all have resulted in charges. But another longtime close aide to Mr. Adams, Ingrid Lewis-Martin, is facing five indictments obtained by the Manhattan district attorney’s office. Those prosecutors accused her of using her position as Mr. Adam’s chief mayoral adviser to fast-track approvals from city agencies and steer contracts for business people in exchange for gifts including cash, crab cakes, home renovations, a television appearance and a pair of diamond earrings.
Ms. Lewis-Martin has pleaded not guilty and denied wrongdoing.
The defendants who were arrested on Wednesday were expected to appear in federal court in Brooklyn later in the day.
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