On Friday, a complaint was unsealed in Brooklyn charging two Queens men with defrauding Medicare and Medicaid by paying illegal kickbacks and bribes and submitting claims for services that were never provided.
“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,” said Assistant Attorney General A. Tysen Duva of the Justice Department’s Criminal Division. “Today’s complaint targets those who prey upon the vulnerable so they can steal from American taxpayers and defraud government programs meant to help the public.”
“The defendants charged today allegedly stole $120 million from federal health care programs by luring the elderly to their businesses with illegal cash payments,” stated U.S. Attorney Joseph Nocella Jr. for the Eastern District of New York. “These charges are part of this Office’s commitment to protecting federal programs and prosecuting those who steal from them.”
“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,” said Acting Deputy Inspector General for Investigations Scott J. Lampert of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG). “Schemes like this, which allegedly drained more than $120 million from Medicare and Medicaid, erode trust in our health care system. HHS-OIG will continue to aggressively pursue those who exploit federal health care programs to ensure they are held fully accountable.”
“Today’s complaint demonstrates the FBI’s commitment to pursue those who defraud taxpayer funded health care programs,” said Acting Assistant Director Gregory Heeb of the FBI’s Criminal Division. “Scheming against programs like Medicare impacts those who need it most. Together with our partners, the FBI will continue to hold accountable criminals who threaten access to critical care.”
“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,” said Special Agent in Charge Harry T. Chavis Jr. of IRS Criminal Investigation (IRS-CI) New York. “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 out the multi-million dollar fraud that led to today’s arrests. Both Kim and Lee must now answer for their alleged crime.”
“Under the leadership of Governor Kathy Hochul and through the independent work of the Office of the State Comptroller (OSC) and the Office of Medicaid Inspector General, New York State has among the strongest oversight and program integrity systems in the nation,” said Acting Medicaid Inspector Frank T. Walsh Jr. “Today’s announcement further reflects the strength of those efforts. Medicaid fraud threatens the health and safety of beneficiaries, wastes taxpayer dollars, and drains essential resources from the health care delivery system. This joint effort sends a clear message that the Empire State is committed to working closely with our law enforcement partners to protect the integrity of the Medicaid program, hold wrong doers fully accountable, and preserve precious health care resources.”
According to the complaint, Inwoo Kim, also known as “Tony Kim” and “Long Jin,” 42, of Flushing, 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). Daniel Lee, also known as “Daniel Yang” and “Donghee Yang,” 56, of Flushing, served as the program director at Happy Life. Between 2016 and 2026, Kim and Yang paid illegal bribes in the form of cash and supermarket gift certificates to Medicaid recipients and Medicare beneficiaries to induce them to fill prescriptions at Kim’s pharmacy.
The defendants also allegedly paid illegal cash kickbacks to Medicaid recipients to induce them to enroll with Kim’s social adult day cares. According to the complaint, Kim discussed the illegal payments by text message, writing to a co-conspirator, “Please give the $10,000 to the Korean members first.” Yang similarly texted about the payments, writing to a co-conspirator, “I gave the payment,” and “I left the envelope [for a patient] with Tony [Kim].” At times, Kim and Yang allegedly submitted claims for day care services that exceeded Royal and Happy Life’s permitted capacity. To generate the cash needed to pay kickbacks and bribes, Kim and Yang withdrew significant cash from bank accounts they controlled. In total, Medicare and Medicaid paid approximately $120 million for prescription drugs and social adult day care services that were medically unnecessary, not provided, or induced by kickbacks and bribes. Law enforcement executed numerous search warrants and seized several bank accounts in connection with the arrests.
Kim and Yang are both charged with conspiracy to commit health care fraud. If convicted, they face a maximum penalty of 10 years in prison.
HHS-OIG, FBI, IRS-CI, and OSC are investigating the case.
Trial Attorney Patrick J. Campbell of the Justice Department’s Fraud Section is prosecuting the case.