They will be arraigned Wednesday afternoon in federal court in Downtown Brooklyn.
Their indictment remained sealed, so the exact charges were not immediately known.
The case centers on a city contract issued during the Adams administration, sources told ABC News.
Carone was one of Mayor Adams' closest advisors, serving as chief-of-staff during his first year in office. Carone played an outsized role in both get Adams elected in 2021, organizing donors and political support in Brooklyn, and his failed re-election bid last year.
Also arrested were Queens hotel owner Yan Po Zhu and her employee Crystal Chen.
The corruption appears connected to a homeless shelter contract with a hotel, Carone appears to have moved the money for the shelter through his younger brother, Anthony Carone.
Yan and Chen have also previously donated to the Adams campaigns.
Attorney Arthur Aidala is representing Frank Carone and said in a statement:
"Frank Carone was part of an administration that publicly challenged what it viewed as the previous White House's dangerous immigration policies and their harmful impact on New York City. Three years ago, after speaking out on these issues, Mr. Carone was notified that he was under investigation by federal authorities.
"Following an extensive three year investigation that examined numerous aspects of Mr. Carone's personal and professional life, prosecutors ultimately brought these charges. Mr. Carone maintains his innocence and looks forward to addressing these allegations through the legal process. He is confident that the facts will demonstrate that he acted lawfully and appropriately at all times."
Todd Shapiro, a spokesperson for Adams, said in a statement that Carone "dedicated decades of his life to public service, the legal profession, and helping countless individuals, businesses, and charitable organizations throughout New York."
"This is an ongoing legal matter and my prayers are with his family," Shapiro's statement said.
----------
* Get Eyewitness News Delivered
* More New York City news
* Send us a news tip
* Download the abc7NY app for breaking news alerts
* Follow us on YouTube