The Justice Department has indicted two men for allegedly concocting a yearslong scheme to defraud federal welfare programs in Queens, New York.
Inwoo Kim and Daniel Lee are accused of running a scam to get a huge payday from Medicare and Medicaid through an adult day care called Happy Life and a pharmacy, according to the indictment.
Assistant Attorney General A. Tysen Duva of the Justice Department’s Criminal Division said the two men “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,” according to a press release.
Kim and Lee allegedly used the day care and pharmacy to bill federal health programs for services and prescriptions that were medically unnecessary, never provided, or came with kickbacks and bribes.
The alleged perpetrators are facing charges for “conspiracy to commit health care fraud.”
Investigators say that between March 2016 and January 2026, Kim, Lee, and unnamed co-conspirators recruited members for Happy Life. Then, they allegedly falsified or exaggerated the use of their services so they could bill for large sums of money related to adult day care and pharmacy benefits.
Two Queens Men Charged with $120M Adult Day Care and Pharmacy Fraud on Medicare and Medicaid
— Criminal Division (@DOJCrimDiv) February 9, 2026
“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…
The complaint claims Happy Life paid “members” $500 to not show up at the clinic and $300 to those who did. But the defendants would still bill Medicaid for day care services whether the recruits showed up or stayed home. In essence, the alleged payments were kickbacks to keep bodies on the roster instead of actually providing real care.
One cooperating witness told investigators that Kim and Lee instructed staff members to ask the insurance plan Healthfirst to approve the maximum of seven days per week of services for a member even if they did not require that level of treatment. This would enable Happy Life to get maximum payments from the government instead of basing their requests on patient need.
Kim and Lee also collaborated with Pharmacy Benefit Managers and a Pharmacy Services Administrative Organization to push prescriptions and over-the-counter products to patients that they didn’t need. Another witness told the authorities that the two men kept spreadsheets that tracked “kickbacks and bribes to Medicare beneficiaries and Medicaid recipients in order to fill prescriptions” at the pharmacy.
Happy Life’s owner used the pharmacy’s benefits to shift money around. Even further, Lee allegedly “used a significant portion of those deposits for gambling.
This particular story hasn’t garnered as much attention yet as much of the focus has been on Minnesota, where people have defrauded government welfare programs of up to $8 billion in taxpayer funds.
President Donald Trump vowed to root out “waste, fraud, and abuse” in programs like SNAP and Medicaid. He ordered a freeze on more than $10 billion in federal childcare and family assistance funding to Democratic states like California, Illinois, Colorado, Minnesota, and New York over concerns about massive fraud.