NYC's Department of Investigation probing city's migrant services debit card contract

NEW YORK — The Department of Investigation is probing a controversial contract that Mayor Eric Adams’ administration entered into to provide migrants with pre-paid debit cards to help them buy food and basic supplies, the Daily News has learned.

It’s unclear exactly what DOI investigators are looking into as it relates to the no-bid $53 million contract, which was awarded by Adams’ administration in early 2024 to MoCaFi, a New Jersey financial tech firm. It’s also unclear whether any other law enforcement agencies are participating in the probe.

The existence of the investigation was confirmed this week by the DOI in response to a Freedom of Information Law request from The News seeking records the agency has obtained related to the MoCaFi contract.

“[The request] is denied on the ground that the records you requested are exempt from disclosure under FOIL because they were compiled for law enforcement purposes and disclosure would interfere with law enforcement investigations,” DOI wrote in response.

A DOI spokeswoman declined to comment Monday. Adams’ office didn’t return a request for comment.

MoCaFi hasn’t been accused of any wrongdoing.

“The company follows all the appropriate procurement processes established when pursuing any government opportunity and our work in New York City is no different,” a MoCaFi rep said Monday. “We are not aware of any investigations into our work.”

Adams is under federal indictment on criminal charges alleging he solicited bribes from Turkish government operatives in exchange for political favors. He has pleaded not guilty.

Federal prosecutors, meantime, are conducting multiple separate corruption probes involving City Hall. Top Adams advisers — including Deputy Mayor for Public Safety Phil Banks, Schools Chancellor David Banks, senior adviser Tim Pearson and NYPD Commissioner Edward Caban — have announced their resignations after getting their homes raided and electronics seized as part of those investigations.

Sources have said one issue the feds are looking at is whether city officials engaged in schemes involving influence peddling and kickbacks on city contracts.

Molly Schaeffer, Adams’ asylum seeker operations director who worked closely with Pearson, was subpoenaed by the feds last month for grand jury testimony. Sources say investigators are looking at the role Pearson, who resigned Friday, has played in awarding migrant services contracts.

Sources directly familiar with the matter told The News Monday that Pearson was involved in awarding the MoCaFi contract. The sources said First Deputy Mayor Sheena Wright — Chancellor Banks’ wife whose electronics were also seized by the feds last month — also worked on the MoCaFi matter.

“The feds have not disclosed anything to us,” Hugh Mo, Pearson’s attorney, said last week. “We’re taking the position that he denies any wrongdoing … A lot of the allegations are salacious and a lot are untrue.”

The Manhattan U.S. attorney’s office, which is leading the federal probe into city contracts, declined to comment Monday when asked about MoCaFi.

Under its contract, MoCaFi is providing hundreds of migrants living in city shelters with pre-paid debit cards they can use to buy food and baby supplies, with a family of four getting as much as $350 per week. This summer, the administration expanded the program so more than 7,300 migrants are expected to benefit from the free debit cards this year.

In exchange for administering the program, MoCaFi can net as much as $2 million in profit — a procurement structure that has drawn criticism from some Council members who question the size of the price-tag. Council members also earlier this year raised alarm about the fact that Adams’ administration awarded the contract without a competitive bidding process, the lack of which they say may have driven up the cost.