MEDICAID FRAUD CRACKDOWN: Federal Agents Raid Brooklyn Adult Day Care Centers as More Than 100 Providers Face Investigation
Federal investigators descended on at least two adult day care facilities in Brooklyn on Tuesday as part of an extensive investigation into suspected Medicaid fraud involving more than 100 taxpayer-funded service providers across New York. Authorities are examining allegations ranging from fraudulent billing and illegal kickbacks to money laundering, in a crackdown targeting the misuse of public funds intended to serve elderly and vulnerable residents.
The enforcement operation included raids in Borough Park and Sunset Park, where agents from Homeland Security Investigations and other law enforcement agencies were seen entering adult day care facilities and removing boxes of potential evidence.
Gov. Kathy Hochul confirmed that the raids were connected to an ongoing investigation that has been underway for several months, describing the operation as a “massive effort to combat fraud and abuse” involving public money and services for vulnerable New Yorkers.
“We are targeting providers we believe who engaged in illegal activity ranging from money laundering to kickbacks to improper billing and other fraudulent activities,” Hochul said during a press conference Tuesday.
According to the governor, investigators have been examining more than 100 providers receiving taxpayer funding because of concerns about possible fraudulent or unlawful practices. Officials have not disclosed how many of those facilities have been found to have committed wrongdoing, and the investigation remains ongoing.
Photographs taken during the Brooklyn raids showed federal agents carrying evidence boxes out of the targeted locations. One of the facilities was Happy Adult Day Care in Sunset Park, while another location in Borough Park was also searched.
Homeland Security Investigations emphasized that submitting false claims for services that were never delivered constitutes a serious offense, rather than an administrative error.
“Billing public programs for care, transportation or other services that were never provided is fraud, NOT a paperwork mistake,’’ the agency stated in a social media post.
An HSI spokeswoman confirmed that agents were conducting a “court-authorized law enforcement action,” but declined to identify the targets or provide additional information because the investigation is still active.
The operation follows growing scrutiny of New York’s adult day care industry, which receives substantial Medicaid funding to provide supervision, activities, transportation and other services for eligible elderly and disabled residents.
Investigators have been examining whether some operators submitted claims for services that were never provided, inflated the number of participants attending their facilities, or used improper financial arrangements to generate Medicaid reimbursements.
The latest raids come after earlier investigations raised questions about facilities receiving millions of dollars in government payments despite concerns about whether they were providing the services reflected in their billing records.
In one previously reported case, the operator of a Brooklyn adult day care facility received approximately $32 million in Medicaid payments while questions were raised about activity at the location. Separate investigations have examined alleged multimillion-dollar schemes involving adult day care operators and improper Medicaid reimbursements.
Hochul maintained that her administration has been working to strengthen oversight of the industry since she took office in 2021, saying enforcement efforts and administrative reforms have helped save taxpayers more than $15 billion in Medicaid expenditures.
New York’s Medicaid system, which provides healthcare coverage and related services to low-income residents, has grown into a program costing approximately $116 billion annually. The enormous volume of spending has intensified concerns about whether the state has adequate safeguards to identify fraudulent claims and prevent improper payments.
The governor’s administration has repeatedly pledged to reduce waste and abuse within the program, although its own handling of Medicaid reforms has also come under federal scrutiny.
The federal investigation comes amid a separate dispute between the Trump administration and Hochul’s government over New York’s restructuring of the Consumer Directed Personal Assistance Program, known as CDPAP, which allows eligible Medicaid recipients to receive care at home from caregivers of their choosing.
Federal prosecutors have alleged that the state’s overhaul of the multibillion-dollar program involved improper conduct in the selection of a contractor. Hochul’s administration has rejected those accusations and sought dismissal of the federal lawsuit brought earlier this year.
Tuesday’s operation extended beyond Brooklyn. The FBI confirmed that investigators were conducting enforcement activity at locations in Queens and Staten Island as well, with search warrants being executed at multiple businesses throughout New York City.
Additional reporting identified two Borough Park locations associated with Happy Adult Day Care Center, at 5118 Fort Hamilton Parkway and 4022 Eighth Avenue, where investigators were seen removing materials.
The crackdown follows several major Medicaid fraud prosecutions involving Brooklyn adult day care operators. Earlier this month, Ahsan Ijaz, a Brooklyn businessman, pleaded guilty in a scheme involving approximately $65 million in fraudulent Medicaid claims. Prosecutors said businesses under his control paid kickbacks to Medicaid recipients and billed for services that had not been provided, including services supposedly delivered while recipients were outside the United States.
In September, another Brooklyn adult day care operator, Zakia Khan, received a 76-month federal prison sentence for her role in a $64 million Medicaid fraud and kickback operation. She was ordered to pay more than $56 million in restitution and forfeit $5 million in proceeds, including property, cash and gold jewelry.
The latest investigation could also bring significant changes to the future of New York’s adult day care program. Hochul has directed the state Health Department to prepare recommendations by December 31 on whether the program should be restructured with stricter oversight or phased out in favor of alternative services.
A moratorium on new adult day care providers, imposed in July, is scheduled to remain in effect until January 2027 and could be extended. State officials have also been directed to strengthen reviews of claims before payment and consider suspending reimbursements to providers where warranted.
Authorities have not announced how many of the more than 100 providers under investigation will face criminal charges, and the searches themselves do not establish that the businesses involved committed fraud.
{Matzav.com}
