Federal agents are conducting an investigation into a potential bribery scheme that revolves around New York City contracts and a consulting firm run by the brother of two high-ranking officials in Mayor Eric Adams' administration, according to individuals familiar with the matter. Prosecutors have recently seized the phones belonging to the schools chancellor, the deputy mayor for public safety, and the consultant, as they suspect that these devices may contain evidence related to bribery and other criminal activities.

The suspected crimes being investigated, apart from bribery, include fraud and violations of the federal Travel Act, a statute commonly employed in corruption cases that encompasses a broad range of conduct, such as extortion and violations of state law. Although the details regarding the alleged bribery scheme and the individuals involved remain unclear, it appears to center around the consulting firm itself and its clients.

It is important to note that this investigation is separate from another federal corruption inquiry that involves the New York police commissioner and his brother, whose phones were also confiscated, leading to calls for the commissioner's resignation. However, the commissioner remains in office as of now.

The recent burst of investigative activity saw federal agents confiscate phones belonging to several officials, including the schools chancellor, David Banks, the deputy mayor for public safety, Philip B. Banks III, and the consultant, Terence Banks. Additionally, the phone of Timothy Pearson, a retired police inspector and senior adviser to the mayor, was also seized. Furthermore, a device connected to at least one of the nine companies believed to be clients of Terence Banks's consulting firm was confiscated.

No charges have been filed against any of the individuals whose devices were taken, and the full extent of the investigation remains unclear. Terence Banks's attorney, Timothy D. Sini, stated that the government has assured them that Mr. Banks is not a target of the investigation. Likewise, Philip Banks's lawyer, Benjamin Brafman, maintained that his client has no criminal liability in the case.

In response to the federal inquiry, David Banks released a statement emphasizing his focus on the new school year while acknowledging his cooperation with the investigation. However, he refrained from providing further details.

This investigation involving the Banks brothers is just one of multiple federal corruption inquiries linked to the Adams administration, causing turmoil within City Hall and raising concerns about Mayor Adams's political future as the Democratic mayoral primary approaches next year. Other ongoing investigations are centered around the police commissioner, the mayor's campaign fundraising, and the mayor's special adviser and director of Asian affairs.

The federal scrutiny surrounding Terence Banks's consulting firm has shed light on a family deeply entrenched in New York City politics and government. The investigation is examining contracts issued under programs designed to encourage the city to engage with small businesses owned by women and members of minority groups, according to sources familiar with the matter.

The consulting firm, known as the Pearl Alliance, was established by Terence Banks, a former subway supervisor, in July 2022. Their services included providing support to clients seeking contracts under the minority and women-owned business programs. However, the company's website, which aimed to bridge the gap between New York's infrastructure and political landscape, has since been taken offline.

This ongoing federal investigation adds another layer of complexity and potential ramifications for Mayor Adams and his administration as they navigate through these turbulent times. As the probes continue, it remains to be seen how deeply this scandal may affect the political landscape of New York City.