Federal prosecutors arrested and charged former New York City Chief of Staff Frank Carone and three others in an alleged bribery scheme involving a migrant shelter contract, accusing them of arranging about $120,000 in payments to help secure city business for a Queens hotel during New York City's migrant crisis.
Prosecutors say the scheme ran from June 2022 to December 2023, as New York City looked for emergency housing amid a surge of migrants arriving from the southern border and "experienced an unprecedented influx of migrant asylum seekers."
The 2022 migrant influx overwhelmed New York City's "right to shelter" system, which guarantees housing for anyone who needs it. The city responded by leasing hotels as emergency shelters for asylum seekers.
The effort was backed by $1.8 billion in federal grants to support emergency housing and expand shelter capacity.
According to the indictment, Zhu, who owned the Microtel Inn in Long Island City, and Chen, who managed the property, failed to secure a contract for a city migrant shelter. Prosecutors say Zhu and Chen then turned to Frank Carone, who was serving as chief of staff to then-Mayor Eric Adams.
The city's Department of Social Services rejected the hotel's application at first because of concerns about the concentration of shelters already operating in the neighborhood, according to the indictment. Frank Carone later intervened on the hotel's behalf.
Prosecutors say he used his position to help the hotel secure a city-funded shelter contract in exchange for approximately $120,000 in bribes.
The money was then routed through a law firm account controlled by Anthony Carone and disguised as legal or consulting fees. Some of the funds were allegedly used to pay Frank Carone's personal credit card bills and benefit a business he owned.
“As alleged in the indictment, the defendants exploited the unprecedented migrant crisis in New York City for their own personal gain,” stated First Assistant United States Attorney Considine. “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. Frank Carone and his brother Anthony Carone are also charged with evading taxes on the proceeds of that scheme. This case demonstrates the Office’s commitment to protecting taxpayer dollars, and holding accountable those who misuse public funds for private gain."
The defendants also maintained a close relationship. In one text exchange in September 2022, Zhu wrote to Frank Carone: “Thank you my big guy,” according to the indictment. The Carones and Zhu socialized frequently and attended gatherings at Zhu’s Long Island home, the indictment said.
In a separate statement, Todd Shapiro, a spokesperson for Adams, said Frank Carone “dedicated decades of his life to public service, the legal profession, and helping countless individuals, businesses, and charitable organizations throughout New York.”
Carone played a key role in Adams’ campaign for mayor in 2021 and served as Adams’ chief of staff in 2022. In 2023, he formed a political consulting firm. He was also a one-time lawyer for the Brooklyn Democratic Party.
Frank Carone’s lawyer, Arthur Aidala, said the new indictment “is not worth the paper upon which it is printed.”
“Today’s indictment is a sad day for our criminal justice system,” Aidala said in a statement. “It epitomizes the government first finding a target and then spending three years and enormous taxpayer resources to find a crime.”
A lawyer for Zhu, Stephen Scaring, said the hotel owner “will be entering a plea of not guilty and is anxious to establish his innocence.”
If convicted of the charges, the defendants each face up to 20 years in prison.