Texts, a Hotel Contract and the Frank Carone Bribery Case

It was 2022, and New York City was scrambling to house an unprecedented wave of migrants. Hotels across the five boroughs were being converted into emergency shelters. Yan Po Zhu, the owner of a Long Island City Microtel Inn, wanted his hotel to become one of them. Federal prosecutors say city officials had repeatedly rejected the property, so Zhu turned to one of the most powerful people inside City Hall.

A federal indictment unsealed in Brooklyn last month alleges Zhu texted Frank Carone, then-Mayor Eric Adams’ chief of staff, asking for help securing an immediate one-year city contract for the hotel. Carone replied with a question: ”What’s the address?” Zhu answered: “29-12 40th Avenue.” Moments later, he sent another message: “Thank you my big guy.”

Prosecutors allege the exchange set in motion a bribery scheme in which Carone accepted more than $120,000 in exchange for helping secure a lucrative migrant shelter contract.

Nearly four years later, on June 24, federal agents arrested Carone, his brother Anthony Carone, Zhu and hotel manager Crystal Chen. By that afternoon, Frank Carone was in a Brooklyn federal courtroom pleading not guilty to charges of bribery, wire fraud, money laundering and obstruction of justice. He was released on a $2 million bond, while Anthony Carone was released on a $500,000 bond.

The indictment says Department of Social Services officials had already concluded the Microtel was unsuitable for housing migrant families because of its size and the concentration of shelters already operating in Long Island City. Still, prosecutors contend Carone continued pressing city officials.

Emails quoted in the indictment capture growing frustration inside City Hall. ”We’ve taken this as far as it could go. So nothing left to do. Thanks for humoring me,” one official wrote. Another added: ”I’m not clear what else you want me to do here.”

Then the tone shifted. An email cited in the indictment instructed staff that the Microtel had “come directly from the top.” ”We should assume it is approved.”

The city ultimately awarded an emergency contract not to Zhu directly but to Housing Options & Geriatric Association Resources (HOGAR), a Bronx nonprofit that operated the shelter inside the hotel. The contract has since grown far beyond the one-year agreement at the center of the indictment.

Public records reviewed by Straus News show it took effect on Nov. 1, 2022, with an original value of $4.03 million. Checkbook NYC now lists the agreement at $14.38 million, reflecting 27 modifications since January 2023 and more than $11.5 million in payments by the Department of Homeless Services.

The records do not explain what prompted each modification. During the migrant emergency, many shelter contracts were extended or expanded. Straus News requested comment from both the Department of Social Services and HOGAR but did not receive a response.

Prosecutors allege the payments followed. The government’s case relies in part on conversations between Chen and another employee after the hotel secured approval.

”The boss completely trusts the two brothers,” Chen allegedly said. The employee asked: ”Isn’t it just about giving 120,000?” Chen allegedly replied: ”In the end, it’s all about money and giving the two brothers a way out.”

Prosecutors allege Zhu and Chen routed 12 payments totaling $120,000 through Anthony Carone’s law firm’s bank account under what they describe as a sham retainer agreement. Rather than legitimate legal fees, prosecutors contend the money was intended to compensate Frank Carone. They further allege Anthony Carone used the account to pay Frank Carone’s American Express bills before writing checks directly to him.

The same law-firm account—largely dormant before 2022—also became a conduit for roughly $500,000 transferred to Frank Carone after he entered City Hall, prosecutors allege. While the government does not claim those payments were themselves illegal, it contends Carone failed to properly disclose the income on his annual financial disclosure forms.

Carolyn Miller, executive director of the city’s Conflicts of Interest Board, said city officials report outside income by source using income ranges rather than exact dollar amounts.

”A filer reports income received of $1,000 or more from each source during the preceding calendar year,” Miller told Straus News. “The income is not reported as an exact amount but rather in ranges.”

She added that officials may amend disclosure reports if information is later found to be incomplete or inaccurate and that both the original and amended filings remain available to the public.

Prosecutors also accuse the defendants of trying to conceal the alleged scheme after learning they were under federal investigation. A government bail memorandum alleges Frank and Anthony Carone created a promissory note in 2024, backdated it to 2022, to make transfers appear to be loans rather than proceeds of bribery. The government also alleges Frank Carone deleted text messages with Zhu, including one that read: “I asked my partners to pay you for a year.”

Investigators also described unusual encounters while executing search warrants. Prosecutors allege Zhu repeatedly covered his face and waved his hand in front of it to prevent agents from unlocking his cellphone using facial recognition. Chen, they say, initially agreed to unlock her phone before claiming she had forgotten the password, entered multiple incorrect passcodes and locked herself out of the device before eventually unlocking it. If convicted, each defendant faces up to 20 years in prison.

Frank Carone’s attorneys have vigorously denied the allegations. Shortly after the indictment was unsealed, attorney Arthur Aidala dismissed it as “not worth the paper upon which it is printed.” Aidala did not respond to Straus News’ requests for comment.

At an initial scheduling conference, Carone’s attorneys surprised the court by requesting an Aug. 24 trial, arguing prosecutors had spent years investigating the case. U.S. District Judge Kiyo A. Matsumoto questioned whether that timetable was realistic given the case’s more than four terabytes of electronic evidence.

Days later, all four defendants jointly asked to postpone the trial until March 2027, citing the volume of discovery, scheduling conflicts and a desire to keep the defendants together in a single trial.

Whether the government can persuade a jury that those text messages, the contract that followed and the payments that came afterward amounted to a criminal bribery scheme will be decided in federal court.