The case is not linked to any council activity, but offices at the city hall were raided as part of an investigation into its head of personnel, Raffaele Marra.
Seen as having been included in Raggi's inner circle, Marra is suspected of accepting an illegal payment in an shady real estate deal unconnected to the administration.
“We probably made a mistake. Marra was already a senior official and we trusted him,” Raggi told a press conference. “I'm sorry, to the citizens of Rome, to M5S and to (party leader) Beppe Grillo,” she said, emphasizing that Marra had not been a political appointee.
Marra being given a senior post by Raggi was controversial because of his past employment by prominent right-wing figures in local politics, including former mayor Gianni Alemanno.
M5S prides itself on being scrupulously ethical and having no links to what it sees as the sleazy ways of Italian politics.
And its ability to make a success of running Rome, where Raggi won the mayor's seat in June, is seen as a key test in the run-up to nationwide elections due in the next 15 months.
Polls suggest M5S, headed by comedian Beppe Grillo, will rival the ruling Democratic Party in the battle to emerge from the polls as the biggest party.
Raggi faces a tough task in trying to turn around a city grappling with the legacy of years of corruption and mismanagement: pot-holed roads, failing refuse services and inadequate public transport.
Supporters say she is starting to make a difference after six months. But rivals have pounced on a string of resignations and cancelled appointments as evidence that the lawyer is not up to the job.
The Rome experience has also exposed what some see as Grillo's controlling role in the party he founded only five years ago. The leader has repeatedly clashed with Raggi and had publicly described himself as “baffled” by the appointment of Marra.
The Democratic Party meanwhile suffered a setback of its own when its high-profile mayor of Milan, Giuseppe Sala, stepped down temporarily after being informed he was under investigation in connection with his previous job as the organizer of the 2015 World Expo fair in the city.
“Although I have no idea about what I am supposed to have done, I decided to suspend myself from my post,” pending clarification, Sala said in a statement.
According to Italian daily Corriere della Sera, Sala is suspected of a misdemeanor consisting of retrospectively dating a file in the tender process for the Expo's preparation work. The paper said the action had had no bearing on the outcome of the tender concerned.
By Angus MacKinnon