Two Queens men are accused of running a decade-long fraud that allegedly siphoned roughly $120 million from Medicare and Medicaid through kickbacks, unnecessary claims, and bogus day care and prescription billing, and multiple federal agencies have opened investigations and filed charges.
Court papers unsealed this week lay out a scheme prosecutors say ran from 2016 through 2026 and involved cash payments and supermarket gift certificates to Medicaid recipients and Medicare beneficiaries to steer them toward specific prescriptions and adult day care services. The complaint says many claims were medically unnecessary, never provided, or induced by illegal payments, and that the scheme used both a pharmacy and social adult day care centers as its vehicle. Investigators say the pattern produced roughly $120 million in improper payments to the defendants’ operations.
The two men named in the complaint are 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. Kim is accused of owning a pharmacy and two social adult day care centers operating as Z & W Empire Enterprise Inc., Royal Adult Daycare, and Happy Life Inc., while Lee is described as the program director at Happy Life. Federal filings link both men to repeated payments meant to induce beneficiaries to use Kim’s pharmacy and the day care centers.
According to prosecutors, the defendants allegedly paid illegal kickbacks and bribes in cash and gift certificates to get patients to fill prescriptions and to enroll in the social adult day care centers. The complaint claims some claims for daycare services exceeded the centers’ permitted capacity, and that large withdrawals from bank accounts controlled by the defendants funded the illegal payments. Law enforcement executed search warrants and seized several bank accounts as part of the arrests.
Assistant Attorney General A. Tysen Duva of the Justice Department’s Criminal Division is quoted in the complaint materials: “The defendants allegedly turned a pharmacy and social adult day care centers meant to help senior citizens into a $120 million Medicare and Medicaid fraud scheme.” That line is part of the government’s broader description of people who exploit vulnerable beneficiaries to steal taxpayer funds intended for care.
U.S. Attorney Joseph Nocella Jr. for the Eastern District of New York also commented on the case, stating: “The defendants charged today allegedly stole $120 million from federal health care programs by luring the elderly to their businesses with illegal cash payments.” His office framed the charges as part of a continuing effort to protect federal programs and pursue those who take from them.
The U.S. Department of Health and Human Services Office of Inspector General weighed in as well with this exact wording from Acting Deputy Inspector General for Investigations Scott J. Lampert: “Pharmacies and social adult day care centers exist to serve and support seniors — not to siphon off taxpayer resources and operate as engines for fraud.” HHS-OIG emphasized the harm such alleged schemes cause to trust in the health care system and promised continued pursuit of those who exploit federal programs.
Acting Assistant Director Gregory Heeb of the FBI’s Criminal Division said: “Today’s complaint demonstrates the FBI’s commitment to pursue those who defraud taxpayer-funded health care programs.” The FBI highlighted the real-world impact of schemes that undermine access to critical care and said it would continue working with partners to hold accountable anyone who threatens those programs.
Special Agent in Charge Harry T. Chavis Jr. of IRS Criminal Investigation New York added: “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. In this decade-long scam, Inwoo Kim and Daniel Lee are alleged to have stolen $120 million from the Medicare and Medicaid system through fraudulent prescription drug and adult day care service claims. IRS-CI special agents worked closely with our federal partners in this investigation, following the money trail and charting the multi-million-dollar fraud that led to today’s arrests. Both Kim and Lee must now answer for their alleged crime.”
HHS-OIG, FBI, IRS-CI, and OSC are listed as investigating agencies in the filings, and Trial Attorney Patrick J. Campbell of the Justice Department’s Fraud Section is prosecuting the case. The Fraud Section’s Health Care Fraud Strike Force Program has a long track record; since March 2007 the program has charged more than 6,200 defendants who collectively billed federal health care programs and private insurers more than $45 billion. Both defendants are charged with conspiracy to commit health care fraud and, if convicted, face a maximum penalty of 10 years in prison.
