A federal judge on Wednesday denied New York City’s legal bid asking the Federal Emergency Management Agency to return $80.5 million in funds that went toward sheltering illegal immigrants.
U.S. District Judge Jennifer Rearden of Manhattan declined to issue a temporary restraining order against the Trump administration, noting the plaintiff failed to demonstrate irreparable harm from the withheld funding. While this represents a loss for New York City now, it could later prevail in the case. The lawsuit was filed on February 21.
The Department of Homeland Security, led by Secretary Kristi Noem, clawed back the money last month after firing four FEMA staffers for sending at least $59 million to New York City hotels housing illegal immigrants in violation of the law. Tech billionaire Elon Musk’s Department of Government Efficiency discovered the unlawful use of the $59 million in grant funding, which was meant to reimburse the city for the hotels it leased as shelters for illegal immigrants.
A DHS official said the department pulled the FEMA funding because the violent Venezuelan gang Tren de Aragua, which used the Roosevelt Hotel as its “base of operations,” was benefiting from the cash flow. The hotel at one point sheltered Jose Antonio Ibarra, the Venezuelan illegal immigrant who killed 22-year-old Georgia nursing student Laken Riley last year.
DHS oversees FEMA, which Noem is looking to dismantle over its failed emergency responses to recent natural disasters.
The city argued that by clawing back the money, the Trump administration sought to thwart the shelter funding program that Congress has appropriated.
“Defendants’ money-grab — after FEMA review, approval, and actual payment, without notice or process of any kind — was, simply put, lawless,” the lawsuit states.
The dispute comes as President Donald Trump continues his crackdown on illegal immigration through mass deportations and deployment of U.S. troops to the southern border, among other actions. Notably, Tren de Aragua, in addition to other gangs and cartels, was recently designated a foreign terrorist organization.
The Roosevelt Hotel, located in Midtown Manhattan, previously symbolized the Biden administration’s lenient border policies that allowed illegal immigrants to enter New York City at record rates. City leadership initially took an interest in housing immigrants but is slowly walking back its accommodations, as the city has seen a decline in illegal-alien arrivals since the spring of 2022.
The shelter at the Roosevelt Hotel is one of more than 50 locations that will be closed by June. Mayor Eric Adams described the closure as a major milestone, which comes under a presidential administration that is much stricter on border security and immigration enforcement than the previous administration was.