A Glen Head businessman, a former New York City mayoral chief of staff, and two others have been charged in an alleged bribery scheme tied to a multimillion-dollar migrant shelter contract awarded during New York City’s migrant crisis, federal prosecutors announced Wednesday.
A 13-count federal indictment unsealed in Brooklyn charges Frank V. Carone, 56, of New York City and Boca Raton, Florida; Anthony J. Carone, 54, of New York City and East Hampton; Crystal Chen, 39, of East Williston; and Yan Po Zhu, also known as Andy Zhu, 51, of Glen Head. The charges include fraud, bribery, money laundering, obstruction of justice, and tax fraud.
According to prosecutors, the defendants allegedly exploited New York City’s migrant shelter program in 2022 by steering a shelter contract worth $6.825 million to the Microtel hotel in Long Island City, Queens. The hotel was owned by Zhu, while Chen served as his business manager.
Federal authorities allege that the city’s Department of Social Services repeatedly determined the hotel was not a suitable location for migrant housing. Prosecutors say Frank Carone, who was serving as chief of staff in the mayor’s administration, intervened and directed city officials to consider the property in exchange for $120,000 in bribe payments from Zhu and Chen.
The indictment alleges the payments were routed through a law firm account controlled by Anthony Carone to conceal their true purpose. Prosecutors say Anthony Carone then transferred much of the money to Frank Carone through checks and payments toward personal credit card bills. Investigators also allege the defendants created a sham legal retainer agreement to disguise the payments as legitimate legal fees.
Federal authorities further allege that Frank and Anthony Carone failed to report income from the scheme on their original 2022 tax filings. After learning they were under federal investigation, prosecutors say the brothers attempted to obstruct the investigation by creating and backdating a promissory note designed to portray the payments as personal loans rather than bribes.
The U.S. Attorney’s Office said New York City received approximately $1.8 billion in federal funding in 2022 to support migrant shelter operations and related services.
All four defendants were arrested Wednesday and are scheduled to be arraigned in federal court in Brooklyn. Prosecutors said each faces up to 20 years in prison if convicted.
The charges are allegations, and the defendants are presumed innocent unless and until proven guilty in court.
