Flushing Residents Indicted in $120 Million Medicare and Medicaid Fraud Scheme
A sweeping healthcare fraud scheme targeting Medicare and Medicaid has resulted in the indictment of two Flushing, New York residents, accused of defrauding the federal programs out of a staggering $120 million. The alleged fraud involved illicit kickbacks, unnecessary services, and a network of adult day care centers and a pharmacy.
The Justice Department announced the indictments on Thursday, identifying the defendants as Kim In-woo, 42, also known as Tony, and Yang Dong-hee, 56, who also goes by Daniel Lee and Daniel Yang. Both individuals are residents of Flushing and face charges of conspiracy to commit healthcare fraud.
According to the indictment, Kim owned and operated Royal Adult Day Care, Happy Life, and a pharmacy, while Yang served as a program manager at Happy Life. The pair allegedly exchanged illegal kickbacks and bribes to Medicare and Medicaid beneficiaries, incentivizing them to obtain prescriptions filled at Kim’s pharmacy and enroll in the adult day care facilities.
The investigation, a collaborative effort involving the Department of Health and Human Services’ Office of Inspector General (HHS-OIG), the Federal Bureau of Investigation (FBI), the Internal Revenue Service (IRS) Criminal Investigation, and the New York State Audit Office, revealed a pattern of fraudulent activity spanning from 2016 to 2026.
Authorities allege the defendants provided bribes in the form of cash and supermarket gift cards to beneficiaries. Evidence presented includes text message exchanges where Kim allegedly instructed an accomplice to prioritize payments to “Korean members first,” offering $10,000 as an initial sum. Yang also reportedly confirmed payments via text, stating, “I paid the money” and “I handed over the envelope to give to the patient to Mr. Kim.”
“The suspect embezzled $120 million from federal health care programs by luring seniors with illegal cash payments,” stated Joseph Nocella Jr., U.S. Attorney for the Eastern District of New York. The Ministry of Health and Welfare echoed this sentiment, emphasizing that an organization designed to support seniors instead exploited taxpayer resources through fraudulent practices.
On the morning of the 6th, the FBI, in conjunction with the New York State Department of Health and local police, executed search and seizure operations at two Korean adult day care centers. Investigators confiscated computers and documents containing sensitive member and financial information. During the raid, attendees had their identification checked and were questioned about receiving cash payments.
The Justice Department estimates that $120 million in Medicare and Medicaid funds were improperly spent on services that were either never provided or were medically unnecessary. If convicted, Kim and Yang each face a potential prison sentence of up to 10 years.
This case underscores the ongoing vulnerability of federal healthcare programs to fraud and the commitment of law enforcement agencies to protect taxpayer dollars and ensure quality care for beneficiaries.
