The city's Law Department is suing the Trump administration over what it said was an unlawful seizure of more than $80 million from a city bank account by the Federal Emergency Management Agency (FEMA), officials announced Friday.

The lawsuit comes after FEMA last week rescinded money it had paid out to the city the week as a reimbursement for expenses incurred covering lodging costs for migrants and asylum seekers.

FEMA awarded the grants on Feb. 4 to ensure "the safe, orderly, and humane release of noncitizen migrants from DHS short-term holding facilities," according to the city. The money is part of the Shelter and Services Program, which provides money to help shelter migrants.

The suit seeks to reclaim the money and prevent the federal government from taking additional money from the bank account in connection to the program in the future. It also seeks to prevent them from withholding funds from the program.

The city said it received no notice before the funds were removed. The lawsuit claims the removal violates federal regulations and the program’s grant terms.

The Adams administration said they received on Feb. 19 a "noncompliance" letter from the federal government in which the Department of Homeland Security indicates “concerns” that the funding “is going to entities engaged in or facilitating illegal activities.” The city, however, said those concerns are unfounded, and they accuse the federal government of withholding the funds “because they oppose the purposes for which the funds were appropriated, awarded, approved, and paid.”

City Comptroller Brad Lander said last Wednesday that a $59 million grant that the administration challenged earlier in the week and another award for $21.5 million were gone. The money was discovered to be missing overnight, and Lander said no one in his office had been aware that the federal government had access to the city's bank account.

The grants were applied for and awarded during the administration of Democratic President Joe Biden but were not disbursed until Feb. 4, the city said.

Soon after, Trump adviser Elon Musk flagged $59 million in payments, writing on X that his so-called Department of Government Efficiency had discovered the money was used to house migrants in “luxury hotels.” Musk gave no evidence to support his claim.

Last Wednesday, Homeland Security Secretary Kristi Noem wrote on X that she "clawed back the full payment that FEMA deep state activists unilaterally gave to NYC migrant hotels," and White House Press Secretary Karoline Leavitt suggested at a briefing that the administration felt paying for hotels for migrants in the city was not a worthy expense while FEMA deals with costly disasters elsewhere.

Currently, less than 45,000 migrants receive city shelter services, down from a high a high of 69,000 in January 2024, according to the city. Since spring 2022, the city says it has spent $7 billion to manage the influx of migrants and asylum seekers.

Information from the Associated Press was used in this report.