NYC lawsuit against Trump admin targets $80M FEMA clawback

New York City filed a lawsuit against the Trump administration on Friday seeking to wrestle back more than $80 million previously sent to the city via the Federal Emergency Management Agency to house migrants.  

The suit argues that the funds were previously approved and then paid out by FEMA, only to be removed from a city bank account on Feb. 11 without notice or administrative process.

The funding had been revoked after Elon Musk claimed that the Department of Government Efficiency found a $59 million FEMA payment to New York City that was being used on luxury hotels to house illegal migrants. Trump later repeated Musk’s claim and argued that “massive fraud” was happening.

New York City was awarded two separate grants during the Biden administration – one for $58.6 million and another for $21.9 million – as the city attempted to pay to house migrants, many of whom were sent by Texas officials who were frustrated with the Biden administration’s handling of the influx of migrants entering the U.S. through the southern border.

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The payments were made under the Shelter and Services Program (SPP) that Congress appropriated $650 million for last year to help local governments respond to the migrant crisis. There are currently fewer than 45,000 migrants staying at taxpayer-funded shelters in New York City, up from a high of 69,000 more than a year ago.

Friday’s lawsuit was filed in the U.S. District Court for the Southern District of New York by the city’s law department, which handles the city’s legal affairs, against President Donald Trump, the U.S. Treasury, the Federal Emergency Management Agency and the U.S. Department of Homeland Security.

The lawsuit accuses the federal government of violating federal regulations and the terms of the SSP grant, as well as abusing the federal government’s authority and obligations to implement congressionally approved and funded programs. ­

The suit argues that on Feb. 19, the federal government belatedly provided the city with a “noncompliance” letter that did not identify any noncompliance by the city. 

“Rather, it announced ‘concerns,’ which are unfounded and do not comport with how the city has managed the unprecedented crisis brought to its doorstep,” the law department said.

Citing the government’s actions as a “money grab,” the law department said the letter was a “mere cover” to mask the federal government’s real purpose, which is to permanently withhold the funds because it opposes their use on migrants.

The city is looking to recoup the funds and is seeking a motion for a preliminary and permanent injunction, and motion for a temporary restraining order (TRO).

New York City Mayor Eric Adams defended and supported the lawsuit in a series of posts on X late Friday, writing that the $80 million was approved, paid for and then rescinded – all while the city spent more than $7 billion of its own taxpayer money to tackle the crisis over the last three years.

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“We are going to work to ensure our city’s residents get every dollar they are owed,” Adams wrote in on post. 

“Without a doubt, our immigration system is broken, but the cost of managing an international humanitarian crisis should not overwhelmingly fall onto one city alone. We have skillfully shouldered the cost of this humanitarian crisis almost entirely on our own, with more than 231,000 people entering our city seeking shelter.”

Meanwhile, New York City Comptroller Brad Lander claimed the suit came about after he forced Adams’ hand on the matter. Adams has come under fire from New York Democrats over his decision to be more cooperative with federal immigration agencies in apprehending criminal illegal migrants amid the Justice Department efforts to dismiss corruption charges against him.

“After my office discovered that Elon Musk and his DOGE goon squad stole $80 million out of the City’s coffers, we successfully pressured Mayor Adams to allow the City’s lawyers to sue the federal government to get our money back,” Lander said in a statement. 

“The lawyers who are standing up to President Trump and Eric Adams’ collusion deserve praise and we look forward to Donald Trump returning the money he stole from New York.”

Lander is running against Adams in the mayoral election later this year.

READ THE LAWSUIT BELOW: APP USERS CLICK HERE.

Fox News’ Landon Mion, Maria Paronich and Jennifer Johnson contributed to this report.