A Brooklyn social adult day-care operator has begun a 57-month federal prison term for turning a Medicaid-funded program into a kickback operation. Prosecutors say Eric Zhu paid beneficiaries to enroll, then billed for care they did not receive. The case shows how fraud aimed at a public benefit can drain both tax dollars and services intended for people who actually need them.
The $3.2 million came from services that were not delivered
The Justice Department’s July 20 sentencing announcement says Zhu owned Prime Life Adult Day Care LLC and ran the scheme from about 2020 through 2025. Medicaid recipients received illegal cash kickbacks or bribes to enroll at the center. Prime Life then submitted approximately $3.2 million in claims for social adult day-care services those recipients never received.
Medicaid paid roughly the same amount, according to the department. The court ordered Zhu to pay almost $3.2 million in restitution and forfeit $1.5 million in fraud proceeds. He surrendered to the Bureau of Prisons on July 20 to begin serving the 57-month term, making the prison result final rather than a proposed sentence or unresolved charge.
The mechanics matter because enrollment can look legitimate on paper. A real beneficiary’s identity was attached to a real provider, while the service record supplied the false link. The alleged absence of care would be difficult to spot from a payment total alone unless investigators compared billing records with attendance and delivery evidence.
Cash enrollment payments corrupt the care record
A kickback is not merely a marketing expense. It can influence a beneficiary to join a program for the payment rather than for a genuine service need, while giving the operator names and identifiers that can support repeated claims. The government says Zhu used several business entities to launder proceeds and generate the cash used for the bribes…