Ex-Adams Chief of Staff Arrested in $6.8M Migrant Shelter Bribery Scheme

Frank Carone, the former chief of staff to ex-Mayor Eric Adams, was arrested Wednesday by the FBI on charges that he steered a $6.8 million city contract to a Long Island hotel owner in exchange for more than $100,000 in bribe payments, federal prosecutors said.

Carone, 56, a prominent Brooklyn lawyer who served as Adams' top aide during his first year in office, pleaded not guilty at federal court in Brooklyn to charges of bribery, wire fraud and money laundering conspiracy. Three co-defendants — his brother Anthony Carone, 54, of Queens; hotel owner Yan Po Zhu, 51, of Glen Head; and Zhu's employee Crystal Chen, 39, of East Williston — also pleaded not guilty to related charges.

Prosecutors said that between June 2022 and December 2023, Frank Carone used his official position to push the city's Department of Social Services to approve Zhu's 75-room Microtel Inn by Wyndham in Long Island City — a hotel that had previously been rejected — as an emergency migrant shelter. The contract, worth $6,825,000, was awarded after the DSS had initially turned down the property, in part because of the concentration of other shelters in the area and community opposition. In exchange, Zhu paid Carone $120,000 in monthly $10,000 installments over 12 months, which Carone used to pay American Express credit card bills, the indictment alleged. Anthony Carone allegedly served as a conduit for the payments through his law firm account, and Chen helped facilitate the transactions.

A federal judge ordered Frank Carone freed on $2 million bond, secured by property in Boca Raton. Zhu was released on $8 million bond and ordered to surrender his firearms to Nassau County police. Anthony Carone was freed on $500,000 bond; Chen on $100,000.

All four defendants face up to 20 years in prison if convicted.

"The defendants engaged in a sweeping bribery scheme to exploit New York City's migrant crisis for their own personal benefit," federal prosecutor Sara Winik told the court.

Carone's attorneys Andrew Goldstein and Russell Capone called the prosecution "utterly misguided" and said their client "had absolutely nothing to do with granting the temporary migrant shelter at the center of these charges."