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By Hollie Silverman
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Two Queens men have been charged with orchestrating a scheme that netted approximately $120 million in Medicare and Medicaid funds, the U.S. Department of Justice (DOJ) said on Monday.
According to a federal complaint unsealed in Brooklyn, the pair allegedly paid illegal kickbacks and bribes and submitted claims for prescriptions and adult day care services that were never provided.
The charges stemmed from a multi-agency investigation involving the Department of Health and Human Services Office of Inspector General (HHS-OIG), the FBI, IRS Criminal Investigation, and New York State’s Office of the State Comptroller, authorities said.
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Why It Matters
Federal prosecutors said the alleged kickback operation targeted seniors and diverted taxpayer funds from Medicare and Medicaid, programs that finance health care and social adult day care services for eligible beneficiaries.
The announcement followed other recent federal and state actions in New York targeting adult day care and Medicaid-related kickback schemes. It also came as the fallout continued from a day care-related scam in Minnesota that has become the focus of President Donald Trump, the Department of Homeland Security, and Immigration and Customs Enforcement.
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Who Was Charged in the Scheme?
Prosecutors charged Inwoo Kim, also known as “Tony Kim” and “Long Jin,” 42, of Flushing, and Daniel Lee, also known as “Daniel Yang” and “Donghee Yang,” 56, of Flushing, with conspiracy to commit health care fraud. The press release said the pair paid cash and supermarket gift certificates to induce Medicaid recipients and Medicare beneficiaries to fill prescriptions at Kim’s pharmacy and to enroll in his social adult day care centers.
Authorities said Kim owned a pharmacy and two social adult day care centers—Z & W Empire Enterprise Inc., doing business as Royal Adult Daycare (Royal), and Happy Life Inc. (Happy Life)—and Lee served as program director at Happy Life.
How Did the Scheme Work?
Between 2016 and 2026, Kim and Lee allegedly exchanged text messages coordinating illegal payments and, at times, submitted claims for day care services that exceeded the centers’ permitted capacity, according to the complaint.
Investigators said the defendants withdrew significant cash from bank accounts they controlled to fund the bribes and kickbacks, resulting in Medicare and Medicaid paying about $120 million for medically unnecessary services, services not provided, or services induced by kickbacks.
Law enforcement executed search warrants and seized several bank accounts in connection with the arrests, and each defendant faces a maximum of 10 years in prison if convicted, prosecutors said.
Other New York Medicaid Fraud Cases
In a related but separate enforcement action announced earlier, two Brooklyn-based recruiters pleaded guilty to conspiring to defraud Medicaid by paying kickbacks tied to social adult day care and home health services totaling more than $68 million, according to a January DOJ press release.
State authorities in New York separately announced indictments in 2025 alleging more than $3.5 million in Medicaid transportation fraud involving false billing and cash payments to beneficiaries in Orange County, reflecting broader enforcement around Medicaid program integrity, according to a November press release from the New York State Office of the State Comptroller.
What Documents Are Required for Medicare in the United States?
To enroll in Medicare, applicants generally need their Social Security number and proof of age and identity, such as a birth certificate or other valid documentation, according to Medicare.gov and the Social Security Administration.
Those applying based on U.S. citizenship or lawful presence may be asked for proof of citizenship (for example, a U.S. passport or naturalization certificate) or immigration status, consistent with federal enrollment rules, the agencies said.
Individuals still working past 65 and covered under employer group health plans may need employer verification forms to delay Part B without penalty or to enroll during a Special Enrollment Period, per official guidance.
Applicants can apply online, by phone, or in person through Social Security, which processes Medicare enrollment for most individuals, according to federal resources.
What People Are Saying
A. Tysen Duva, Assistant Attorney General, DOJ Criminal Division, said in a DOJ press release Monday: “The defendants allegedly turned a pharmacy and social adult day care centers meant to help senior citizens into a $120 million dollar Medicare and Medicaid fraud scheme.”
Joseph Nocella Jr., U.S. Attorney for the Eastern District of New York, said in the press release: “The defendants charged today allegedly stole $120 million from federal health care programs by luring the elderly to their businesses with illegal cash payments.”
Harry T. Chavis Jr., Special Agent in Charge, IRS-CI New York, said in the release Monday: “Using the backdrop of an adult day care center, it’s alleged the two charged today had devised an elaborate scheme filled with bribery, kickbacks and good old-fashioned deception.”
What Happens Next
Kim and Lee face up to 10 years in prison if convicted of conspiracy to commit health care fraud, with the case being prosecuted by the DOJ Fraud Section as part of the Health Care Fraud Strike Force program.
The DOJ said its strike force has, since 2007, charged thousands of defendants accused of collectively billing tens of billions of dollars to federal health programs.
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