Frank Carone, who parlayed his close ties to former Mayor Eric Adams of New York into a lucrative consulting job, is the focus of a long-running federal corruption investigation that has examined his business dealings and time in City Hall, according to several people with knowledge of the matter.
A lawyer and powerful figure in Brooklyn Democratic circles, Mr. Carone has long been one of Mr. Adams’s closest political associates. He was a dominant force in Mr. Adams’s successful 2021 campaign and in City Hall, where he served as chief of staff during the former mayor’s first year in office.
The full scope of the inquiry — including what charges might be weighed and whether any other people are under scrutiny — remains unclear, and it could conclude with no charges being filed.
But if an indictment does result from the inquiry, it would add another stain on the legacy of a mayor whose administration was battered by investigations of possible corruption in his dealings and those of many of his top aides. Mr. Adams himself was indicted on federal corruption charges in a case that was ultimately abandoned by the Trump administration but nevertheless crippled his re-election effort.
The investigation involving Mr. Carone, which has not been previously reported, was being conducted by Brooklyn federal prosecutors and the F.B.I., the people said.
Mr. Carone, in a statement, denied wrongdoing and attributed 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, saying “baseless accusations are nothing new to me.”
“Anyone and everyone who actually knows me and has worked alongside me would say that I am conscientious and principled in how I comport myself and all that I do,” Mr. Carone said.
Mr. Carone has for years been exceptionally close to Mr. Adams, playing a central role in both his political campaigns and his administration. But while more than a dozen close associates of Mr. Adams and senior figures in his administration had their phones seized or homes searched in recent years, Mr. Carone had not appeared to face legal peril.
Representatives of the F.B.I. and the office of the U.S. attorney for the Eastern District of New York, Joseph Nocella Jr., declined to comment.
The prosecutors and federal investigators have been focused on Mr. Carone at least since the first half of 2024, according to the people familiar with the inquiry.
That May, they issued grand jury subpoenas to several clients of Mr. Carone’s consulting and lobbying firm, Oaktree Solutions, which he formed in January 2023 after leaving City Hall, several people with knowledge of the matter said. Like others interviewed about the inquiry, they spoke on the condition of anonymity because they were not authorized to discuss the matter.
Those people said they believed that the Oaktree clients were subpoenaed after the prosecutors obtained the company’s bank records; those who received subpoenas were in a range of businesses, including real estate, they said.
Later in 2024, one of the people with knowledge of the inquiry said, an aspect of the investigation appeared to be focused on real estate partnerships and other business deals.
Mr. Carone formerly practiced law at the firm Abrams Fensterman, and also served as counsel to the Brooklyn Democratic Party. His former law firm and his associates have also been tied to what the insurance company Geico has described in multiple federal lawsuits as massive fraud schemes involving phony and unnecessary health-care claims and money laundering.
In 2024, federal prosecutors in Manhattan charged some of the defendants sued by Geico with criminal conspiracy to commit health-care fraud using New York’s often-abused “no-fault” auto insurance law, which requires insurers to pay for medical care after car crashes regardless of who is at fault. Three of the four defendants in that case have pleaded guilty.
Neither Mr. Carone nor his former law firm has been accused of wrongdoing in any criminal or civil case related to insurance fraud, but their dealings with those sued by Geico have been portrayed by the insurer in court papers as fueling fraudulent schemes. Mr. Carone and his former firm have said they were victimized in the scheme and had no knowledge that fraud was taking place.
A spokesman for Abrams Fensterman, Todd Shapiro, said that the firm “at all times acted ethically, lawfully and in full compliance with New York’s legal and ethical standards.” Mr. Shapiro said the firm had filed a complaint about the fraud with the Brooklyn district attorney’s office, provided information to prosecutors and filed civil suits to recoup money that he said was stolen.
Mr. Carone and his associates created corporate entities, which Geico called “funding companies,” to pay supposed providers of medical services in exchange for the right to collect on their claims, according to court documents and people familiar with the events.
Instead of going to doctors, some of the funds advanced by the companies created by Mr. Carone and his associates were laundered through a jeweler and used to pay kickbacks in the scheme, Geico said in one case. Some of the funding companies associated with Mr. Carone have settled lawsuits filed by Geico.
As Geico’s lawsuits have wended their way through the courts, Mr. Adams and his administration have faced an avalanche of law enforcement investigations, searches, subpoenas and indictments. They included the charges brought against his former chief adviser, Ingrid Lewis-Martin, who was accused of bribery and other crimes by the Manhattan district attorney’s office, as well as a separate state corruption case against his buildings commissioner. Both cases are still pending in State Supreme Court.
Mr. Adams’s schools chancellor, his deputy mayor for public safety, his first deputy mayor, two of his police commissioners and his chief political fund-raiser all also came under scrutiny by federal authorities.
Mr. Carone has known the former mayor for two decades and aided his 2013 ascent to the Brooklyn borough presidency. He has also at times sought help for some clients confronting issues with city government.
When Mr. Adams ran for mayor in 2021, he hired Mr. Carone’s firm and participated in Zoom events from Mr. Carone’s office.
When Mr. Adams became mayor in 2022, he made Mr. Carone his first chief of staff. And when Mr. Adams was indicted on federal corruption charges accusing him of accepting bribes, illegally soliciting donations from foreigners and having them routed through straw donors, Mr. Carone helped him broker a relationship with President Trump, who was about to begin his second term.
Mr. Trump’s Justice Department abandoned the case against Mr. Adams without addressing its strength, indicating instead that the administration needed Mr. Adams’s help with immigration enforcement and that a criminal trial would interfere.
In dismissing the charges, the presiding judge, Dale E. Ho of Federal District Court in Manhattan, wrote, “Everything here smacks of a bargain: dismissal of the indictment in exchange for immigration policy concessions.” Mr. Adams has said that the dismissal was tantamount to vindication.
More recently, Mr. Carone served as the chairman of Mr. Adams’s 2025 re-election campaign and tried to put together a deal for the mayor to drop out of the race in exchange for an ambassadorship to Saudi Arabia. The talks fell apart, and Mr. Adams ended his campaign without taking a post in the Trump administration.
Since Mr. Adams left office, Mr. Carone has actively helped him as he tries to establish new lines of business, including creating a New York City-themed cryptocurrency coin. The coin launch went sideways, and both men have been trying to salvage the business amid accusations that they may have misled investors.
Dana Rubinstein contributed reporting.
William K. Rashbaum is a Times reporter covering municipal and political corruption, the courts and broader law enforcement topics in New York.
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