Frank V. Carone, a Brooklyn power broker and longtime confidant of former Mayor Eric Adams of New York, was arrested on Wednesday on federal bribery and money laundering charges, along with his brother and a Queens developer.
An indictment unsealed Wednesday accused 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 bribes.
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. Also arrested on Wednesday was Mr. Zhu’s business manager, Crystal Chen.
In a news release, Michael Considine, the first assistant U.S. attorney in Brooklyn, 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,” said Mr. Considine, who announced the charges with James C. Barnacle Jr., the head of the New York F.B.I. office; Harry T. Chavis Jr., who leads the city’s I.R.S. office; and Nadia I. Shihata, the D.O.I. commissioner.
All four of the defendants appeared in Federal District Court in Brooklyn on Wednesday afternoon and pleaded not guilty. They were released on separate bonds and ordered to surrender their passports. Frank Carone, 56, and Anthony Carone, 54, both wore black sweatshirts and hardly spoke during the proceeding, other than to address the judge.
Two of Frank Carone’s lawyers, Russell Capone and Andrew Goldstein, said in a statement on Wednesday that he had served the city honorably and contended that a speedy trial would vindicate him.
“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.”
Speaking after the arraignment, Arthur L. Aidala, another lawyer for Frank Carone, called the case politically motivated payback for Mr. Adams’s response to the migrant crisis. (The case, however, was brought by President Trump’s Justice Department, which was allied with Mr. Adams.)
Anthony Carone declined to comment, as did Ms. Chen, 39. She tried to cover her face with a sheet of paper as she walked away from the courthouse.
Mr. Zhu’s lawyer, Stephen P. Scaring, said his client “is anxious to get to court and disprove these allegations.”
John F. Carman, a lawyer for Ms. Chen, could not be reached for comment on Wednesday.
F.B.I. agents took Frank Carone, Anthony Carone, Mr. Zhu, 51, and Ms. Chen into custody at their respective homes early Wednesday, people with knowledge of the matter said.
A lawyer and consultant, Frank Carone 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 to City Hall and becoming his 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, Frank Carone helped lead an ultimately successful effort to win the good graces of Mr. Trump, whose Justice Department asked a judge to drop the federal corruption charges against Mr. Adams.
Mr. Zhu is active among politically influential community leaders in New York’s Chinese American diaspora who openly support the ruling Chinese Communist Party. In 2019, he stood with Linda Sun, the former aide to Gov. Kathy Hochul of New York who was later indicted on charges of fraud, tax evasion and unregistered lobbying, at a demonstration against the visiting Taiwanese president. That year, Mr. Zhu attended the 70th anniversary of the founding of the People’s Republic of China in Beijing, along with Ms. Sun.
In 2024, Mr. Zhu marched in New York City’s St. Patrick’s Day Parade with members of the Police Department and Mr. Adams. He attended Mr. Trump’s inauguration last year, posing for pictures with House Speaker Mike Johnson and Secretary of State Marco Rubio, according to a video posted by a Chinese-language news outlet. Nassau County Executive Bruce Blakeman, a Republican running for governor, has referred to Mr. Zhu and his wife as “friends.”
A spokesman for Mr. Blakeman said he had been introduced to Mr. Zhu by the county’s police commissioner and “knows nothing about Mr. Zhu’s background or business.”
The accusations against Frank Carone and the others grew out of the crisis that started in 2022 when more than 200,000 migrants began arriving in New York, and the city was required to house them under a decades-old “right-to-shelter” mandate.
As the city began renting hotels to house migrants, Mr. Zhu sought an emergency contract from the city’s Department of Social Services for the 75-room Microtel. But city officials responded that they already had several shelters in Long Island City and refused Mr. Zhu’s requests.
Around that time, in June 2022, Mr. Zhu cultivated a relationship with Frank Carone, inviting him to his home in Nassau County on Long Island, prosecutors said.
The indictment included photos of the men and others by a swimming pool in front of a mansion and inside a wine cellar. The indictment said the photos were taken on 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 kept socializing with Frank Carone and asked him to exert his influence, prosecutors said.
“My brother 29-12 40 Ave please help me get done we need to refinance,” Mr. Zhu texted him on Sept. 26, 2022, listing the Microtel’s address.
The next day, Anthony Carone, Frank Carone’s brother and a lawyer, texted Mr. Zhu, “I want to talk to you about LIC,” an apparent reference to the hotel, the indictment said. A day later, they met 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, 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, a person 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 a contract for Mr. Zhu with the Microtel’s address and Ms. Chen’s contact information.
The official wrote that the information had “come directly from the top …. I know it is in LIC, but we should assume it is approved.”
The city’s contracting agency soon issued a letter of intent to award a contract for the Microtel that 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,” the indictment said.
Anthony Carone used the law firm account for payments from other clients Frank Carone had referred to his brother while acting as 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 the Carones instructed Frank Carone’s personal assistant to transfer money from the account to pay Frank Carone’s credit card charges for travel, dining, fitness memberships, clothing and other personal expenses.
The Carones 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, they drafted a backdated loan agreement from Anthony Carone to Frank Carone in an effort to explain the payments, later providing the document to investigators, the indictment said.
Earlier this year, when the investigation was first disclosed, Frank Carone issued a statement denying wrongdoing. He ascribed the scrutiny 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, Frank Carone now faces legal jeopardy even as the former mayor moves on with his life. A spokesman for Mr. Adams issued a statement on Wednesday defending the former mayor’s close associate.
“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.
The Carone investigation was one among nearly a dozen federal and state corruption inquiries focused on members of the former mayor’s inner circle or his associates.
Not all have resulted in charges. But another longtime 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 adviser to fast-track approvals from city agencies and steer contracts 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.
Michael Forsythe contributed reporting.