The chief of staff of former New York City Mayor Eric Adams has been charged with accepting $120,000 in bribes in exchange for directing a city homeless shelter contract to a hotel owner in the New York City borough of Queens, according to an indictment unsealed on June 24.
Frank Carone worked as Adams’s chief of staff during his first year in office and was a close adviser who helped fundraise for the mayor’s failed reelection bid last year.
The indictment charges Carone and his brother Anthony Carone, as well as the Queens hotel owner, Yan Po Zhu, and Crystal Chen, Zhu’s assistant. They are charged with several offenses, including bribery, wire fraud, and money laundering.
The defendants were arrested on June 24 and are expected to appear at a federal court in the New York City borough of Brooklyn in the afternoon.
According to the indictment, Frank Carone pushed the Department of Social Services to accept Zhu’s hotel, Microtel Inn by Wyndham, to house illegal immigrants during the border crisis in 2022, when Southern states were sending buses of illegal immigrants to New York City. The city had instituted a program to contract local hotels to house illegal immigrants.
In 2022, the city received a federal grant of more than $1.8 billion to help the city fund the emergency shelters for the influx of illegal immigrants.
“These defendants chose greed over integrity, exploiting a humanitarian crisis and siphoning taxpayer funds intended to support vulnerable migrant families,” IRS Criminal Investigation Special Agent in Charge Harry T. Chavis said.
According to the indictment, payments were made to a law firm where Anthony Carone is a partner. Zhu set up an allegedly sham retainer with the law firm to help his hotel secure the city shelter contract. Anthony Carone then transferred the funds, which came in monthly installments of $10,000, to Frank Carone.
Multiple times the department rejected Microtel’s bid for a shelter contract, as it had fewer units than other hotels that bid for the contract and was adjacent to an existing shelter facility. Residents in the Long Island City neighborhood of Queens were complaining about the shelters.
But Frank Carone allegedly used his position in City Hall to press the Department of Social Services to reconsider Microtel for a contract. In exchange, he allegedly received payment from Zhu and Chen totaling $120,000. The department had already assessed Microtel to be unsuitable for a temporary shelter, but ultimately Microtel received a shelter contract worth more than $6.8 million.
Zhu hired a consultant to help secure a shelter contract, but in June 2022 his bid was rejected by the city. According to photos provided by the U.S. attorney’s office, Zhu already had a personal relationship with Frank Carone.
SMS messages between Zhu and Frank Carone reveal that Zhu sought Frank Carone’s guidance in securing the shelter contract. After the Social Services Department rejected Zhu’s bid, Frank Carone allegedly reached out to the commissioner of the department and directed the commissioner to reconsider Microtel’s bid to host an emergency shelter.
“The alleged conspiracy resulted in a massive betrayal of the American taxpayers’ trust,” FBI Assistant Director in Charge of the New York Field Office James Barnacle said.
In 2024, Frank and Anthony Carone became aware that the FBI was investigating the deal. They allegedly fabricated evidence to make the payments from Anthony Carone’s law firm look like a personal loan to his brother. According to prosecutors, they back-dated a promissory note and then provided it to federal investigators.
Frank Carone, a longtime power broker in Brooklyn who served as the Brooklyn Democratic Party’s attorney for years, founded a lobbying firm after leaving the Adams administration in December 2022.
The defendants may face as many as 20 years in prison if convicted.
