A Brooklyn adult day care operator was sentenced to 76 months in prison for leading a Medicaid billing scheme that took in tens of millions of dollars meant for elderly and disabled program participants. Zakia Khan, 55, must pay $56 million in restitution and forfeit $5 million in proceeds, including two properties, cash and gold jewelry the government says she bought with the stolen funds. The sentence was announced by the U.S. Attorney’s Office for the Eastern District of New York.
Khan ran her scheme through Happy Family Social Adult Day Care Center and a related company, both of which billed New York’s Medicaid program for services tied to seniors and adults with disabilities who attend day programs in place of a nursing facility. Prosecutors say the billing far outpaced anything the centers actually provided.
How Happy Family Social Adult Day Care Billed $64 Million
According to the Eastern District of New York U.S. Attorney’s Office, Khan’s companies billed Medicaid $64 million between October 2017 and July 2024, and the program actually paid out $56 million on those claims. Investigators say the scheme relied on kickbacks paid to marketers and, in some cases, to the recipients themselves, a structure designed to keep enrollment numbers up regardless of whether people needed or received the billed services. The Justice Department’s national release on the case likewise put the fraudulent billing at $64 million, matching the local office’s figures.
Adult day care programs exist specifically to keep older and disabled Medicaid recipients living at home rather than in a nursing facility, a setting that costs the program far more per person. That makes the model an efficient one for legitimate providers — and, prosecutors say, a lucrative one to exploit, since a facility can bill for a full roster of participants whether or not those participants actually show up for services. The kickback structure investigators describe, paying marketers and sometimes recipients themselves, is a recruiting mechanism common to enrollment-based Medicaid fraud: it turns finding new billable names into a paid job rather than a byproduct of genuine care…